China tightens green finance rules with 2025 Catalogue

Starting 1 October, onshore green debt issuers must comply, whilst offshore issuers may only reference it.

China has released an updated framework that identifies projects eligible for green finance, tightening oversight whilst expanding the scope of eligible activities.

The Green Finance Endorsed Project Catalogue (2025 Edition), issued in July by the People’s Bank of China (PBOC), the National Financial Regulatory Administration, and the China Securities Regulatory Commission, replaces fragmented rules for green bonds and loans.

According to Sustainable Fitch’s report, from 1 October, all onshore issuers of green debt must comply, whilst offshore issuers can use it as a reference.

The catalogue introduces new subcategories, including “green trade” and “green consumption,” extending eligibility beyond production to areas such as distribution and consumption-related activities.

Moreover, the report also noted that it targets heavy-polluting sectors, with a new category on industrial transition for industries such as steel and petrochemicals.

The framework is designed to make it easier for companies, particularly small and medium-sized ones, to access financing for decarbonisation measures such as energy efficiency upgrades.

The rules add more detailed technical standards, for instance, requiring building materials such as bricks, glass, and ceramic tiles to qualify as green.

The 2025 Catalogue also emphasises green manufacturing. More than half of the 271 tertiary categories relate to manufacturing activities and products, spanning industrial equipment, transport, service robots, agricultural products, renewable energy, and other sectors.

Internationally, the catalogue takes partial cues from standards set by the International Capital Market Association but does not fully align.

For example, China labels energy-efficient mining equipment as “green-enabling,” whilst ICMA requires further information for it to qualify.

China’s catalogue also adopts a hybrid approach to project eligibility, combining specific standard-based and definition-based criteria.

Furthermore, the 2025 Catalogue also includes some fossil fuel-related activities, such as carbon capture for enhanced oil recovery and energy-efficient coal gasification, that are generally excluded or subject to stricter criteria under other frameworks, including the EU taxonomy.