CHINA’S clean energy pledges are prompting a supply of new financing tools to fund the estimated 43 trillion yuan (US$6.53 trillion) needed to switch from heavy, polluting industries to clean projects.

    The Beijing Environment Exchange endorsed a call option backed by 20,000 local carbon permits Thursday, the first of its kind in China, which was bought by trading firm CMB Sinolink.

    Rival bourse, the Shanghai Environment and Energy Exchange, also plans to launch four forward contracts to trade over the counter (OTC), backed by Shanghai permits which expire in each quarter of 2017, according to the Shanghai Clearing House.

    China, the world biggest energy consumer, wants to increase clean energy use in power generation to 35 percent by 2020 from the current 27 percent.

    To try and meet the capital requirement for this economic restructuring, China plans a national carbon market by 2017 that will cover all provinces and nearly 10,000 of the most carbon-intensive companies mainly in power, steel and oil industries.

    China currently has seven regional pilot carbon markets.

    Market information provider ICIS forecasts China’s national market will open at 40 yuan for trading of the China Carbon Allowances in 2017 and increase to 65 yuan in 2021.

    ICIS launched a weekly price assessment Thursday, hoping to set a reference benchmark price for carbon credits to be delivered in March 2018 in the national market. (SD-Agencies)