Industrial Bank : IB) Implements First Batch of Cross-Compliance Period Carbon Emission Allowanc...

Recently, IB has successfully implemented the first batch of cross-compliance period carbon emission allowances pledge financing in China's national carbon market. This innovative financing approach not only ensures that companies can fulfill their carbon market compliance obligations on time but also helps them to revitalize carbon assets and provides financial convenience.

In Xinjiang, IB executed the first such deal in the national carbon market. The Urumqi branch of IB provided financing to Xinjiang Qiya Aluminium Electric Co., Ltd, a key emitter in the national carbon market, using the company's pledged National Carbon Emission Allowances (CEAs). However, the pledged CEAs needed to be settled by the end of 2023, creating a mismatch with the financing period. Understanding this challenge, IB innovatively offered a cross-compliance period carbon quota pledge financing solution. Under this arrangement, the currently pledged CEAs at IB can be released at the end of 2023 to meet compliance obligations, with the company providing additional appropriate guarantees in the interim. Once the new compliance cycle's CEAs are obtained, they will be promptly and fully pledged to IB. This solution safeguards the bank's legitimate interests while ensuring the company's compliance with carbon market regulations.

Following this, IB accelerated the replication and promotion of this business model, expanding the cross-compliance period carbon emission allowances pledge financing from a single breakthrough to multiple implementations. The Guiyang branch of IB provided similar financing to Taisen (Guizhou) Bamboo Resources Development Co., Ltd. Similarly, the Harbin branch utilized surplus CEAs from corporate compliance to provide pledge financing services to Suihua Zhongmeng Thermal Power Co., Ltd. These initiatives represent further exploration and innovation in the cross-compliance period carbon emission allowances pledge financing solution, enriching IB's carbon finance service toolkit. By ensuring timely quota payments and compliance with carbon market obligations, these efforts assist enterprises in activating their carbon assets and providing financing convenience, thus better promoting the green and low-carbon transformation of China's economy.

As a pioneer in China's green finance sector, IB has actively supported the national "Dual Carbon" strategy in recent years. The bank has shifted its focus from pollution reduction to carbon reduction, progressively developing a specialized green finance product system encompassing carbon reduction series, pollution reduction series, and carbon finance series. IB is actively improving the infrastructure services for the carbon market, accelerating the layout of its carbon finance product system, and establishing a comprehensive carbon finance product system covering clearing and settlement, deal arrangement, pledge financing, and asset management. As of the end of September, the bank's green finance financing in the carbon reduction field reached 1.04 trillion yuan, accounting for 56% of its total green finance, a 7% increase from the previous period.