China's central bank to extend low-carbon lending tool to end of 2027

BEIJING (Reuters) - China's central bank will extend a programme providing financial institutions with low-cost loans intended to help companies to cut carbon emissions, the government said on Sunday.

The People's Bank of China (PBOC) will extend the policy to support carbon-reduction projects by companies to the end of 2027, China's state council said.

The PBOC financing scheme was launched in 2021. The financing window gives banks up to 60% of the principal for qualified loans at a one-year lending rate of 1.75%.

In a sweeping statement of policy goals that was short on specific implementation plans, China also promised to develop tax and investment policies that would support what Beijing calls a "green transformation" of the world's second-largest economy.

The plan included commitments to promote battery-powered vehicles, energy and water-saving home appliances and the use of more environmentally friendly building materials.

It repeated a target China had previously set to increase the proportion of non-fossil energy consumption to about 25% by 2030.

The overall target, according to the plan announced on Sunday, was for China to put its economy "fully on the green and low-carbon track" by 2035 with declining carbon emissions by that time.

(Reporting by Ethan Wang and Kevin Krolicki; Editing by Toby Chopra and David Goodman)