Industry standards are important to ensure transparency and alignment in the booming green bond market
Danske Bank support Climate Bonds Initiative (CBI)’s new set of criteria for green bonds in the shipping industry. Additionally, Danske Bank has been part of CBI’s Industry Working Group, thereby contributing to the development of the criteria.
A joint understanding of the definition of “green”
The shipping criteria will provide a science-based assessment process on the low carbon and climate resilient credentials of ships, and will determine whether or not a green bond’s Use of Proceeds are aligned with the Paris Agreement.
“Financing shipping with green bonds comes with a tremendous potential for the growth of the green bond market. It is a natural next step for us to support the Climate Bonds Initiative to get a common understanding of how to define green shipping,” says Lars Mac Key, Head of DCM Sustainable Bonds and a Member of the Climate Bonds Initiative Shipping Standard Industry Working Group.
“Industry standards like these are important to ensure transparency and alignment in the booming green bond market. Danske Bank has worked with sustainable shipping for years, and are, among other things, a signatory to the Poseidon Principles, and were a project lead in the Norwegian Government sponsored Green Coastal Shipping project,” he continues.
- No dedicated fossil fuel carrying vessels (No LNG Tankers, No Crude Carriers).
- Zero emissions ships are automatically eligible, along with infrastructure that is dedicated to refuelling or recharging these ships.
- Ships that are not zero-emissions must comply with the declining emissions intensity threshold (using Annual Efficiency Ratio (AER) or Energy Efficiency Operational Index (EEOI)
- The declining emissions intensity starts at the median 2012 AER or EEOI for each size and class of ship and declines to zero by 2050. A ship must remain underneath this threshold throughout the tenor of the bond AND provide evidence that it can technically remain under the threshold over its entire operating life.
- Jack up rigs that are dedicated to installing renewable energy infrastructure are eligible, provided that they are also zero-emissions.
CBI is an international investor-focused not-for-profit organization working to mobilize the USD100tn bond market for climate change solutions. The Climate Bonds Initiative carries out market analysis, policy research, market development; advises governments and regulators; and administers a global green bond Certification Scheme. For more information, please visit http://www.climatebonds.net.
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