How to Read China's Green Bond and Transition Finance Rules: the 2025 Green Finance Catalogue, the 2024 Transition Industry Catalogue, the Green Bond Principles, the Shanghai Exchange's Green, Carbon-Neutral and Transition Bond Rules, and the Transition Finance Standards

Short answer. In China, 'green' is defined by a catalogue. Since 1 October 2025 the PBOC, NFRA and CSRC Green Finance Endorsed Projects Catalogue (2025) applies to all green finance products, with exchange listings and share issuance excluded for now. It covers wind turbines and components, PV cells and modules that meet the industry norms, and the construction and operation of wind and solar plants, and in its greenhouse-gas column these items are marked √ (low-carbon enabling) or √√ (direct emission reduction). Green bond proceeds go 100% to green projects under the Green Bond Principles, and wholly to qualifying projects under the Shanghai Stock Exchange's rules. Transition finance is a separate track: the exchange's low-carbon transition bonds generally need at least 70% of proceeds in transition fields, or KPI-linked terms instead, and PBOC sector standards for steel, coal power, building materials and agriculture were on trial as of 2025. This guide explains how to read each layer.

1. The catalogues that define 'green' and 'transition'

The 2025 green finance catalogue. PBOC, NFRA and CSRC issued the Green Finance Endorsed Projects Catalogue (2025) by a notice dated 27 June 2025, built on the NDRC 2024 transition industry catalogue and the 2021 Green Bond Endorsed Projects Catalogue. It applies uniformly to all green finance products, except — for now — listing and share issuance on the Shanghai, Shenzhen and Beijing exchanges and the NEEQ, and took effect on 1 October 2025.

Transition rules for existing deals. Loans approved but not disbursed before publication, and bonds outstanding or already approved or registered, keep the historical standards; bonds filed but not yet approved or registered may choose; these bonds are encouraged to disclose under the 2025 catalogue. CNWattHub reading: when you read a green bond issued before October 2025, check which catalogue its prospectus uses.

Energy items. Item 4.1.1 covers wind equipment manufacturing, including onshore turbines of 5 MW and above, offshore turbines and components such as blades, bearings, cables, gearboxes, towers and offshore wind piles. Item 4.1.2 covers PV cells and modules that meet the latest PV Manufacturing Industry Norms. Items 4.2.1 and 4.2.2 cover the construction and operation of wind and solar power facilities.

The √ and √√ marks. √ marks an item with a low-carbon enabling contribution (no direct emission reduction itself, but a significant contribution elsewhere); √√ marks an item with direct emission-reduction benefits. The wind and PV manufacturing items 4.1.1 and 4.1.2 carry √; the wind and solar facility items 4.2.1 and 4.2.2 carry √√. The catalogue also says the standards it cites are additional requirements and do not exempt a project from other laws, standards and supervision.

The 2024 transition industry catalogue. NDRC and nine other departments issued the Green and Low-Carbon Transition Industry Guidance Catalogue (2024) on 2 February 2024, revised from the 2019 Green Industry Guidance Catalogue. Projects started before it may still be classified under the 2019 catalogue, approved but unstarted projects may choose, and financial institutions are encouraged to finance compliant domestic and Belt and Road projects on market and rule-of-law principles; a mutual-recognition mechanism with international green standards is to be built gradually.

2. Green bonds: use of proceeds, disclosure and review

Principles. NAFMII reports that the China Green Bond Principles, issued in July 2022 by the Green Bond Standards Committee (a self-regulatory coordination mechanism under the inter-ministerial mechanism for corporate credit bonds), set out the definition and four core elements of green bonds and state that proceeds should go 100% to green projects, in line with international standards. The Principles' own text was not retrieved for this guide.

Shanghai Stock Exchange rules (2026 revision). The SSE published its revised special-bond guideline on 30 January 2026, effective immediately, replacing the 2024 revision.

• Use of proceeds. Green corporate bond proceeds must go entirely to qualifying green projects — construction, operation, acquisition, related working capital or repaying the projects' interest-bearing debt. Projects are identified by reference to the national green finance catalogue; overseas issuers may also use the Common Ground Taxonomy report or the EU Climate Delegated Act.
• Disclosure. The prospectus states project category, recognition basis and environmental-benefit targets; during the bond's life the issuer reports use of proceeds, project progress and environmental benefits, and the trustee reports its checks annually.
• External review. An independent evaluation or certification is optional where projects meet the national catalogue or an international taxonomy, but required at filing where investors cannot easily identify the projects as green.
• Carbon-neutral label. Bonds funding projects marked √√ in the catalogue may be labelled 'carbon-neutral green corporate bonds' and must quantify energy savings (in standard coal) and carbon reductions. Proceeds may refinance the issuer's own green-project spending of the previous 12 months.

CNWattHub reading: for an energy developer the √√ mark is the practical test — wind and solar facility items carry √√ and so can back a carbon-neutral label, while manufacturing activities that meet items 4.1.1 or 4.1.2 are in the catalogue but carry √.

3. Transition finance: a separate track

Policy direction. The March 2024 guiding opinions of PBOC and six departments aim to build an internationally leading system of finance for green and low-carbon development within five years; they call for unified rules on green bonds' use of proceeds, disclosure and supervision, for research on carbon-accounting and disclosure standards with issuers required to calculate and disclose the emission reductions and emissions of financed projects, and for faster transition finance standards defining a transition activity catalogue, disclosure, products and incentives. These are policy directions, not rules in force.

PBOC sector standards. At an April 2025 press conference the director of PBOC's Research Bureau described transition finance as, usually, the low-carbon transition of traditional high-emission sectors, distinct from green finance. Standards for steel, coal power, building materials and agriculture were on trial in some regions, with about RMB 42.5 billion of loans by end-January 2025, and a second batch for seven sectors including shipping and chemicals was being drafted. He said standards help avoid 'greenwashing' and 'fake transition', and that six green finance standards had been issued with 19 in development. The sector standards' texts were not retrieved.

Transition bonds in the market. NAFMII issued a notice in May 2022, under PBOC guidance, announcing a pilot under which it planned to launch transition bonds to support the low-carbon transition of traditional industries; the notice's operative terms were not retrieved. On the Shanghai exchange, low-carbon transition corporate bonds must generally place at least 70% of proceeds in transition fields, which include energy saving in energy-intensive industries, safe, efficient, green and smart coal mining and clean fossil-fuel use, data-centre efficiency, park upgrades and fields in the national transition catalogue; proceeds may refinance spending of the previous 3 months, and external review is encouraged rather than required. Transition-linked bonds instead tie coupon step-ups or step-downs, early maturity or one-off payments to KPIs and targets; they are exempt from the 70% rule but must have annual third-party tracking of KPI performance until the linked terms are executed.

CNWattHub reading: the transition list names coal mining and clean fossil-fuel use explicitly; check the financed projects and use of proceeds against each track's conditions rather than the issuer's industry, and read which track and which percentage the prospectus claims.

4. International comparability

PBOC's official said China, the EU and Singapore released a Multi-jurisdiction Common Ground Taxonomy at COP29 in November 2024, after a China–EU comparison found the two sides' standards about 80% highly overlapping. The IPSF instruction report (November 2024 update, a translation in which the English original prevails) says the third edition covers 76 climate-mitigation activities and 20 activities contributing to other environmental objectives, up from 72 in the June 2022 update, and that it does not require either side to change its taxonomy.

Reading table

Checklist

CNWattHub editorial method, not a sourced rule:

1. Identify which catalogue the bond uses (2025 catalogue or a historical standard) and the catalogue item number for each project.
2. Check the √ or √√ mark for each item and whether the bond claims a carbon-neutral label.
3. Read the share of proceeds committed: entire proceeds for green bonds, generally at least 70% for use-of-proceeds transition bonds; KPI-linked bonds are exempt from the 70% rule, so read their stated use of proceeds instead.
4. Ask for the external review or certification report, and whether it is annual.
5. For KPI-linked bonds, read the KPI, the target date, the baseline and the coupon adjustment.
6. For cross-border investors, check whether the projects also fall within the Common Ground Taxonomy activities.

Scope limits

National catalogue notices and one catalogue, one NDRC notice, one set of guiding opinions, one exchange guideline, NAFMII releases, one PBOC press-conference transcript (republished) and the IPSF report (translation) only. The Green Bond Principles, the Shenzhen exchange rules, NAFMII rule texts and the PBOC sector transition standards were not read; no issuance, pricing or enforcement data is quoted. Not investment, legal or regulatory advice.