China has continued to increase financial support for carbon reduction and set up a new system to push energy transformation, an official said before the closing meeting of the fifth session of the 13th National Committee of the Chinese People's Political Consultative Conference (CPPCC) on Thursday.

In November last year, the People's Bank of China promulgated a new monetary policy tool for special relending for the clean and efficient use of coal, and provided 200 billion yuan ($31.66 billion) to support the transformation of the coal industry.

Read more: China to launch $31.4 billion reloans for clean use of coal

It is estimated that the tool will save the country more than 40 million tons of coal every year and reduce carbon dioxide emissions by 110 million tons if the nationwide rollout is completed, said Jin Penghui, deputy director of the Shanghai Head Office of the People's Bank of China and a CPPCC member.

"With the special loan, coal power companies can have enough financing to upgrade their systems," Jin said.

In addition, a new system of financial support for carbon reduction is also being formed that can help develop new energy sources such as wind power and photovoltaics and provide financial support for traditional energy transformation, he said.

China has been making efforts to diversify from a coal-based energy production structure. The proportion of coal in China's total energy consumption dropped from 72.4 percent in 2005 to 56.8 percent in 2020, according to a white paper released in October last year.

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