Editor's note: China aims to peak its carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060, major goals in a national green transition drive. This series looks at efforts in various sectors to meet the goals.

City of Huzhou leads the way with pilot green loan program and first-in-China digital evaluation system

At hardware machinery and equipment group Zhejiang Chang'an Renheng Technology, new investments in low-carbon practices and other green measures are reaping major rewards.

The company in Huzhou, Zhejiang province, obtained its latest reward－a 10 million yuan ($1.48 million), low-interest loan－after earning carbon credits in the first green financial arrangement of its kind in the province.

The loan program was launched by Zhejiang Huzhou Power Supply Co, together with a group of financial institutions, as a new type of green financial product that is tied to companies' green or low-carbon performance.

Candidates for the loans are among a leading group of small and medium-sized enterprises. The program is intended to help companies that qualify to obtain low-interest loans to improve their development and to promote the green transformation of industrial chains.

Through the use of "carbon accounts", information about enterprises' carbon emissions, carbon neutrality efforts and carbon efficiency can be converted into credits, with higher ratings earning more credits and paving the way for more and cheaper loans.

The participating financial institutions then provide "green credit" and low-interest financing services, depending on the carbon credits in the account.

The sustainable practices of Zhejiang Chang'an Renheng Technology, as well as its qualifying for lower interest rates on financing, have proved to be a game-changing advantage for the technology-intensive company, according to its executives.

The company, located in Changxing county in Huzhou, is among small and medium-sized enterprises in the province that have won accolades for their advanced technology, innovation and development potential. The enterprises were included on a list of industry leaders released by the Ministry of Industry and Information Technology.

The enterprises have been lauded for adding jobs, optimizing the local economic structure, strengthening the local economy and promoting the green transformation of the industrial chain.

The companies' environmental inroads are showing how Huzhou is taking the lead in the country's development approach, inspired by President Xi Jinping, who has said that "lucid waters and lush mountains are invaluable assets".

The city's model for green financial mechanisms follows the rollout by the State Council, China's Cabinet, of similar reform and innovation pilot zones in Zhejiang, Jiangxi, Guangdong, Guizhou and Gansu provinces as well as the Xinjiang Uygur autonomous region.

Huzhou's total bank loan balance to individuals and businesses stood at 720.4 billion yuan at the end of 2021, a year-on-year increase of 21.3 percent, and the growth rate has remained in the top three for the province for 72 consecutive months, according to the local government.

The balance was nearly quadrupled from the end of 2015, said Guo Zhengjiang, vice-president of the city's central sub-branch of the People's Bank of China.

The city's green credit balance was 161.5 billion yuan, an increase of 22.4 percent, by the end of last year. The bank's rate of nonperforming loans was 0.38 percent, with its credit asset quality ranking second in the province.

Yu Yinghong, vice-president of Industrial and Commercial Bank of China's Huzhou branch, said that "green finance actually covers three aspects－environmental protection, climate change improvement and the comprehensive utilization of resources".

Huzhou's comprehensive system is one of the major factors behind the smooth development of the city's green finance sector, Yu said.

"The concept of green financing is rooted in every department, including the Bureau of Ecology and Environment and the Bureau of Agriculture and Rural Affairs. It is not one person who strives to promote this. The whole government, the system and the people are promoting it together," Yu added.

China has seen a boom in green financing, backed by policies and regulations, as the country accelerates its green transition and economic restructuring to achieve high-quality and sustainable development. The nation aims to peak its carbon dioxide emissions before 2030 and realize carbon neutrality before 2060, part of a national green transition drive amid the growing global focus on the environment.