Ping An Insurance Company of China’s subsidiary, Ping An Bank, has provided a 2.3 billion yuan ( US$322 million ) loan to Shaanxi Coal Group’s Yulin Chemical Company, with the aim of supporting its Coal Clean and Efficient Conversion Demonstration Project, which promotes cleaner and more efficient coal processing, and aligns with China’s low-carbon development goals.

The project is listed in the National Development and Reform Commission’s 2024 Catalogue for Guiding Industry Restructuring. It uses advanced technologies to convert organic and inorganic sulphur into usable sulphur and repurposes slag, a byproduct of turning coal into a fuel gas, for building materials. This approach embodies a circular economy model of “reduce, reuse and recycle”, maximizing resource use and minimizing environmental impact.

Since June 2022, Ping An Bank has provided a cumulative 3.44 billion yuan in loans to the project and, it says, it will continue to offer financing support as construction progresses.

In light of China’s dual carbon goals to peak carbon emissions by 2030 and achieve carbon neutrality before 2060, high-carbon industries face significant pressure to transition to more sustainable practices.

This transition presents a substantial funding gap, estimated to reach 487 trillion yuan over the next 30 years, an average of approximately 16 trillion yuan annually. Traditional high-carbon sectors, such as coal power, steel and cement, often struggle to secure financing for these critical upgrades, despite having transition plans.

As an extension of green finance, transition finance, the bank points out, plays a crucial role in facilitating industrial upgrades and ensuring stable economic growth. Guided by Ping An’s green finance strategy, the bank seeks to provide funding for projects with significant carbon reduction potential, particularly in sectors with high emissions or those facing challenges in direct emission reduction.

“We are delighted to partner with Yulin Chemical in developing cleaner and more efficient coal conversion technologies,” the bank shares. “This project underscores our commitment to driving a green transition and sustainable development. We will continue to innovate in our financial services and support outstanding enterprises like Yulin Chemical to achieve China’s dual carbon goals and industrial upgrades.”