China's central bank announced a plan on Wednesday to provide 100 billion yuan ($15.12 billion) of relending facilities to support coal development and energy storage, another major move to safeguard energy supply as uncertainties mount regarding global coal supplies.
The money will be used to support safe coal production and reserve, including modern coal mine construction, green and efficient technology application, and intelligent mine construction, among others. It will also support coal power companies' guaranteed supplies of thermal coal, read a statement on the official website of the People's Bank of China (PBC).
Loans will be issued on a monthly basis, the central bank said.
The statement highlighted the challenges China's energy sector is facing, indicating that the current world situation is "complex and evolving," and the global energy prices remains volatile, which may bring "greater uncertainty and challenges" to China's energy security and stable economic operation.
Coal is still the main source of energy in China, and it will guarantee the country's energy security for some time as China has sufficient coal resources, according to a report from the Xinhua News Agency, citing Yu Bing, deputy head of the National Energy Administration.
Last year, coal-fired power plants produced 60 percent of China's electricity, Yu said.
To ensure this year's coal supply, the country will strive to increase coal production capacity by 300 million tons by approving higher production capacity, expanding output and putting new projects into operation.
The latest move comes just days after China scrapped tariffs on coal imports from May 1 to March 31, 2023, a rare move that indicated increasing pressure amid soaring global coal prices and supply concerns.
Different types of coal products ranging from anthracite to coking coal, which are normally subject to tariff rates between 3 to 6 percent, will be excluded from duties during the stated period.
China previously removed tariffs to encourage coal imports in 2008, when the global economy was mired in a financial crisis that started in the US.
Chinese experts said that the move is expected to further guarantee China's coal supply and stabilize domestic coal prices, which have been on an upward spiral.
Despite external uncertainties, China possesses the capability to guarantee a secure, reliable and stable supply of energy, said Fu Linghui, a spokesperson with the National Bureau of Statistics.
During the first quarter of 2022, the country's coal output rose 10.3 percent year-on-year to hit 1.08 billion tons, while crude oil output saw steady expansion by rising 4.4 percent and power generation rose 3.1 percent to reach 1.99 trillion kilowatt-hours.