BEIJING- China's central bank said on Monday it will provide financial institutions with low-cost loans to help firms cut carbon emissions, supporting the country's long-term carbon neutrality goals.

China, the world's biggest source of climate-warming greenhouse gases, aims to bring emissions to a peak before 2030 and achieve carbon neutrality by 2060.

The carbon emission reduction supporting tool from the People's Bank of China will help financial institutions to provide loans to firms on the premise of independent decision-making and risk-taking, it said in a statement.

The bank will provide 60% of loan principals made by financial institutions for carbon emission cuts, with a one-year lending rate at 1.75%, it said.

The carbon emission reduction loans can be rolled over twice, it added.

Interest rates on loans made by banks and other financial institutions will be in line with the benchmark lending rate, or the loan prime rate (LPR), it said.

The one-year LPR stands at 3.85%, while the five-year LPR is at 4.65%.

Financial institutions will apply for the low-cost funding from the PBOC after the loans for carbon emission reductions are made, the central bank said.

The PBOC will require financial institutions to publicly disclose information on carbon emission reduction loans and carbon emission cuts financed by such loans, it said.

(Reporting by Kevin Yao and Beijing newsroom; Editing by Louise Heavens and Jan Harvey) ((kevin.yao@thomsonreuters.com; +8610 5669 2128;))