An increasing number of companies in China's most polluted region of Hebei have gained green loans with emission permits as pledges, following the guideline launched by the province to strengthen financial support for environmentally friendly industries and projects.

All the major companies in the steel, cement, electricity generation and glass industries will have the emissions permits, which aim to control the total pollutants emitted, said Li Bao, deputy head of the province's environmental protection bureau.

The move encourages participants to perform better in environmental protection, with financial support, and it can help the industries restrict pollution as part of the national promotion on emission trading.

"It (the mortgage service) encourages the initiatives of companies to cut down pollutants' emissions, then fuels them to adopt green technology to further reduce pollution," said Wang Xiaojiang, professor at Hebei University of Economics and Business and also a professional consultant to the bureau.

Hebei has experienced serious smog that lingers longer than in other major cities. It has required considerable effort such as cutting outdated capacity in highly polluted industries like iron and steel to start the emissions trading that will keep a tight rein on pollution.

The province's regulation stipulates that emissions allowances for major pollutants such as sulfur dioxide and nitrogen oxides will be restricted, in terms of a loan-to-value ratio, to a maximum of 90 percent.

It is the first official policy since the emerging emissions market started in June 2013. Until March of this year, 42 companies had applied for the loans, of which 13 managed to receive loans of 86 million yuan ($1.4 million) in total.

More than 10,000 tons of pollutants have been mortgaged, according to the report from the Shijiazhuang branch of Everbright Bank, the major financial partner and green loan lender in Hebei.

A chemical company producing xylene applied for a loan and received 5 million yuan ($805,582) after mortgaging its emission permits worth of 6.81 million yuan ($1.1 million), which helped the company's growth.

"The credit extension is only for companies with good credit in production and environmental protection," said Gao Ming'an, manager of the Shijiazhuang branch of Everbright. Any companies with excessive emissions or responsible for a pollution incident will be forbidden from applying.

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