Shanghai bank eyes carbon market

Shanghai-listed Pudong Development Bank has signed a strategic deal with a local carbon exchange, aiming to development financial products targeted at companies to be regulated by the city’s new emissions trading scheme next year.

The $2.45 billion bank, China’s seventh biggest, moved to take advantage of the Shanghai Environment and Energy Exchange’s role as the local government’s favoured marketplace when companies start trading carbon permits to meet emission targets.

The deal was part of the exchange’s strategy to involve financials in the Shanghai CO2 market, which could span to cover more than 800 major energy users in the city, China's largest by population.

“We will broaden the cooperation with the financial sector further,” Bin Hui, the exchange’s vice director, told Point Carbon News.

“Both parties will undertake a study of potential areas of cooperation, to meet the needs of the developing emissions trading scheme,” he added.

Pudong Development Bank has offered cheap loans to green businesses since 2010, and it finances projects under the Kyoto Protocol’s Clean Development Mechanism.

Last year the exchange signed a similar deal with China Industrial Bank.