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Euro Watch – Green bond issuance to explode

Euro Watch – Green bond issuance to explode

  • Europe has set an ambitious agenda for climate and energy policies for the coming decades with the ultimate goal of achieving a climate-neutral Europe with net-zero greenhouse gas emissions by the middle of this century
  • The main elements of the policy agenda are related to greenhouse gas emissions, energy from renewables and energy efficiency for which the EU has set binding climate and energy targets for each individual member state
  • Support for green political parties is highest in the countries that pollute the most, which should put extra pressure on governments to meet their targets
  • We take stock of the policy plans in the six largest eurozone economies and the amount of extra climate and energy related investment needed in the coming years
  • Based on the climate and energy plans of the six biggest eurozone countries, we have calculated that investment needs related to these plans would be around EUR 460bn during the period 2020-2023 in the eurozone as a whole ith the national plans showing that roughly 25% of the investment will be financed by the public sector and the rest by the private sector
  • Financing the climate transition creates ample room for sovereign and corporate green bond issuance
  • We expect the green EGB market to triple nd the green corporate bond market to double by 2023 with corporate issuance dominated by utilities and companies in the financial sector