On the morning of November 27, 2024, the closed-door seminar themed "Paths for Financial and Monetary Innovation to Support the Inclusive Transition of Resource-based Regions" was successfully held in Beijing. Co-hosted by the Huzhou Institute of Green Finance and Sustainable Development (hereinafter referred to as "Huzhou Green Finance Institute") and the Beijing Greenovation Institute (hereinafter referred to as "Greenovation Institute"), the seminar gathered more than 20 representatives from government think tanks, Chinese financial institutions, multilateral development financial institutions, industry associations, enterprises and social organizations. The participants conducted in-depth discussions on the progress of financial and monetary policies as well as practical experience in the inclusive transition of resource-based regions. They also explored ways to leverage diversified capital through financial and monetary innovation to support resource-based regions in achieving economic, social and environmental sustainable development. During the seminar, guests from Shanxi, Shandong, Inner Mongolia and other places shared local experience and multi-dimensional professional insights, providing valuable suggestions and references for the inclusive transition of resource-based regions.
Opening Remarks
Yue Lijun, Director of the Energy Transition Program at the Natural Resources Defense Council (NRDC), stated in her opening remarks that the green and low-carbon transition of resource-based regions is a crucial link in achieving the "dual carbon" goals and high-quality development. It requires coordinated advancement in both energy and industrial transition, coupled with strong fiscal and financial support. By improving the policy framework for green development and securing financial guarantees, we can help resource-based regions establish a sustainable transition model, promote industrial diversification and the coordinated development of renewable energy and traditional energy, thus laying out practical paths for inclusive transition.
Keynote Speeches
Ye Yanfei, former First-level Inspector of the National Financial Regulatory Administration, briefed the audience on the progress of financial policies supporting green and low-carbon transition. Considering the actual development conditions of resource-based regions, he proposed that the fiscal mechanisms in these regions need to be fundamentally optimized, and a floating reserve fund for mineral resource prices should be established. This fund will help traditional enterprises prevent and address risks while providing financial support for investment in emerging industries and capacity building. He emphasized that the key to energy and industrial transition lies in improving the interest coordination mechanism and market-oriented operation model. Through the coordinated implementation of financial and fiscal policies, financial vitality can be better released to accelerate the green and low-carbon transition of resource-based regions.
Xu Zhen, President of the Shandong Electric Power Industry Association, elaborated on the current status, challenges and potential of energy transition and capital mobilization in Shandong. In recent years, Shandong has vigorously promoted the integration of external electricity into the province and the installation of renewable energy capacity. Meanwhile, it has strengthened energy storage construction to alleviate the pressure of renewable energy absorption. The province has also taken measures such as flexible upgrading of coal-fired power units and exploration of carbon capture technologies to ensure the achievement of the "dual carbon" goals. However, the national unified power market mechanism still needs optimization as it cannot fully meet the demands of energy transition. For instance, the issue of reasonable proportioning in medium and long-term power transactions affects the activity of the spot market, which in turn impacts the investment returns of renewable energy projects. To support green development, Shandong has introduced green funds, low-interest loans and international capital. It has also actively promoted cooperation between state-owned and private enterprises, forming a diversified financing path. In the future, Shandong will continue to increase capital investment, promote the application of new technologies and policy coordination, further unlock the potential of green finance, and set an important example for national energy transition.
Panel Discussion
Financial Support for the Transformation of Old and New Growth Drivers and Inclusive Development in Resource-based Regions
The panel discussion was hosted by Guo Hongyu, Deputy Director of the Beijing Greenovation Institute. During the session, participants discussed practices from Hubei, Shandong, Shanxi and Huzhou, offering further references for the transition of resource-based regions.
Mo Lingshui, Deputy General Manager of China Carbon Technology (Hubei) Co., Ltd., shared the planning and progress of Hubei Province's 10 billion yuan mother fund for green and low-carbon development. Focusing on the establishment of this 10-billion-yuan dual carbon fund as the core measure, Hubei is exploring a "one mother fund plus multiple sub-funds" model to leverage social capital. It aims to form a fund ecosystem of over 20 billion yuan with "one leading fund and multiple sub-funds" within 2-3 years, which is expected to drive 100 billion yuan of capital into the green and low-carbon industries. The fund will prioritize investments in fields such as clean energy, green transportation, green infrastructure and environmental protection, as well as industries aligned with national strategic development directions including advanced manufacturing, artificial intelligence and new quality productive forces. Adhering to the principles of open cooperation and market-oriented operation, the fund adopts a collaborative model involving central enterprises, local state-owned enterprises, capital and industries, along with joint efforts across provincial, municipal and district levels. This ensures the preservation and appreciation of state-owned capital while serving the real economy. Currently, the initial 2 billion yuan mother fund has been established, and the launch of sub-funds and related projects is scheduled for December to provide green financial support for Hubei's high-quality development.
Leung Keng Hang, Principal Infrastructure Finance Specialist at the Asian Development Bank (ADB), introduced the innovative financial model adopted by the ADB in supporting the inclusive transition of resource-based regions. The Shandong Green Development Fund led by the ADB supports the province's green and low-carbon transition through an innovative financial mechanism integrating "ADB financing, catalyzing private capital and capacity building". Co-funded by international institutions such as the ADB, the Agence Française de Développement (AFD), KfW Group and the Green Climate Fund (GCF), the fund adopts a multi-layered capital structure to integrate resources from the public and private sectors and encourage private capital investment in low-carbon technologies and the green economy. With an initial scale of 1.5 billion US dollars, the fund aims to attract five times that amount in social capital, reaching a total scale of 7.5 billion US dollars eventually. Its investment areas include renewable energy, energy efficiency improvement, green transportation and smart cities. The fund is committed to linking project green ratings with equity and debt investment terms through customized green investment guidelines, so as to ensure high-quality promotion of green transition.
Wang Dongyan, person in charge of green finance at the Shanxi Science City Institute of Energy and Environmental Innovation, detailed the financial policies, challenges and opportunities for promoting the inclusive transition of high-carbon industries in Shanxi. As a typical resource-based region, Shanxi's industries are dominated by coal, coal-fired power, steel and coking, making its transition face enormous challenges. Therefore, Shanxi's green and low-carbon transition not only requires strong financial support but also needs to focus on inclusiveness, ensuring employment and improving ecological environment quality. In recent years, Shanxi has introduced a series of transition finance policies, including the establishment of a transition finance catalog covering key industries and the issuance of guidelines for transition loans, to promote technological transformation and green upgrading of coal-fired power, coking and other industries. Nevertheless, Shanxi still confronts challenges such as a large funding gap, difficulties in employment placement, huge demand for energy supply guarantee and insufficient economic resilience. Further supporting financial policies, improved market mechanisms and guided technological innovation are needed to facilitate the inclusive transition of its high-carbon industries.
Zhang Fang, Project Director of the Huzhou Institute of Green Finance and Sustainable Development, shared Huzhou's practical experience in transition finance, including the establishment of local transition finance standards, the construction of a carbon account system, and the innovation of incentive mechanisms and capacity building. Huzhou has formulated the "8+1" transition finance standards and an enterprise project database to prioritize support for eligible transition-oriented enterprises and projects. It has fully utilized green finance incentive mechanisms to encourage the participation of financial institutions and enterprises. To address the lack of technology and data, Huzhou launched a carbon account system covering credit clients of financial institutions. It also provides operational guidelines for enterprises and financial institutions through standardized templates and process instructions. These innovative measures have effectively reduced transition costs and promoted the marketization and commercial sustainability of low-carbon transition.
Chen Yingjie, Supervisor of the Climate and Energy Program at the Beijing Greenovation Institute, discussed the challenges and best practices in advancing transition finance from the perspectives of enterprises, infrastructure and financial institutions. She emphasized that several key measures can enhance the effectiveness of transition finance, such as combining medium and long-term loans with enterprise transition plans, building data support platforms (e.g., Huzhou Green Loan Connect), involving insurance in risk sharing, and strengthening transparency in information disclosure (e.g., Bank of China's transition finance report). She also suggested that unified transition finance standards and technical pathway catalogs should be issued as soon as possible, information disclosure by key enterprises and financial institutions should be strengthened, and the resilience of transition should be improved through public-private partnership models to provide diversified financial support for projects such as sustainable agriculture and infrastructure renovation.
Q&A and Group Discussion
During the Q&A session, experts held in-depth discussions on the challenges in expanding the scale of transition finance and accelerating its implementation, and put forward corresponding suggestions. They unanimously agreed that the main current challenges include the lack of unified national transition finance standards, low data availability, and insufficient motivation and capacity among financial institutions and enterprises. Based on these analyses, the experts put forward several suggestions: formulate unified transition finance standards promptly and clarify detailed transition directions and technical pathways for key industries; strengthen incentives and constraints for financial institutions by defining transition finance statistical systems and monetary policy incentives; establish comprehensive service platforms and enterprise databases to simplify data acquisition processes and customer classification for financial institutions; and guide financial institutions to integrate transition finance into business expansion to enhance commercial sustainability. Additionally, the experts emphasized that strong national policy support and refined climate goals will help transition finance more effectively encourage enterprises to formulate medium and long-term transition plans, thereby achieving a balance between supply and demand in transition and facilitating the realization of the dual carbon goals.
As China further advances its green and low-carbon transition, financial and monetary innovation has become key to the inclusive transition of resource-based regions. As experts pointed out, the issue is not a shortage of funds, but the lack of mechanisms to ensure that funds at all levels and of various types flow effectively into inclusive transition initiatives. To create a better environment for capital mobilization, the participating experts put forward the following policy suggestions and prospects. First, accelerate the implementation of unified national transition finance standards and industry catalogs to provide policy and technical references for local governments. Second, strengthen cooperation between local finance and financial institutions, optimize local fiscal incentive mechanisms, and reduce risks associated with transition finance. Third, deepen international cooperation, introduce multilateral development financial institutions and market-oriented tools to mobilize diversified capital. Fourth, pay attention to inclusive elements in the transition process, with a focus on employment placement, social security, and cost-benefit distribution mechanisms, to ensure that the transition is inclusive, fair and sustainable.
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