The European Commission (EC) wants to start issuing the first of a series of so-called green bonds in October, which it intends to cover with a third of the extraordinary recovery fund used to kick-start the economies of European Union countries after the coronavirus crisis. The commission plans to raise a total of 250 billion euros (6.4 trillion CZK) with the help of these bonds, which will guarantee owners’ investments in environmentally friendly projects. Their emissions demonstrate the growing importance of green finance for the EU on the path to climate neutrality, EU Budget Commissioner Johannes Hahn said today.
According to Hahn, the bonds could be more interesting for investors than the classic ones, as they will guarantee that their money will get into environmentally friendly projects.
“I hope we can really show non-European countries how important this is to us,” the commissioner told reporters, saying that the EU wanted to lead other countries by setting an example to start differentiating green finances as well. The Union plans to achieve climate neutrality by the middle of the century, ie to produce no greenhouse gas emissions or to balance them, for example by planting trees.
More than a third of the EU countries already issue their own green bonds, and the union will become one of the world’s largest players in the green bond market through the issue. Their parameters will meet the standard of the International Capital Markets Association (ICMA), but the commission wants to follow them to its own EU rules for green investments known as taxonomy. However, the EU has not yet determined their final form, especially due to disagreements over the sustainability of nuclear or gas investments. According to Hahn, the union will have its own standard for green bonds “perhaps a year or two”.
The commissioner also announced today that the EU executive is preparing another auction of classic bonds from mid-September, with which he wants to gradually fill the remaining two-thirds of the fund with a total volume of almost 800 billion euros (20.3 trillion CZK). This year alone, it wants to borrow over 100 billion euros to pre-finance projects, and it intends to gradually raise the rest until 2026, when the possibility of drawing on the fund will end.