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Green bond issuance surges in 2020

  • Market: Emissions
  • 19/01/21

A late-2020 surge in underwriting was only the start of a coming wave of financial market activity in green bonds, asset managers, risk analysts and sustainability specialists all told Argus.

After a deep trough in activity in early 2020, green bond issuance in September spiked to $62bn and maintained strong volume through the end of last year, so that total green bond issuance ended 2020 13pc higher than 2019. The $305.3bn in green bonds issued in 2020 drove total issuance of green bonds since 2007 through the cumulative $1 trillion level, data from Bloomberg BNEF showed.

Accounting for green bonds as a separate class from sustainable bonds, climate-specific bonds or other broad environmental, social and governance investment products remains challenging, and different totals will come from different methods, a panel at the Reuters NEXT conference noted on 11 January. The BNEF numbers rely on use-of-proceeds definitions from the International Capital Markets Association and the Loan Markets Association.

Standards for green bonds are cohering among private firms, industry bodies and international organizations. The impending merger of the Sustainability Accounting Standards Board and the International Integrated Reporting Council, announced in November 2020, is aimed at simplifying the evaluation of green bonds and other sustainable investing products. At the same time, former Bank of England governor Mark Carney is leading an international effort to create standards that can underpin trading of greenhouse gas emissions and related financial products ahead of the COP26 climate conference planned for November.

As those definitions are standardized, growth in the issuance of green and transition economy bonds will be "huge," according to Climate Bonds Initiative chief executive Sean Kidney.

Independent review practices developed in order to price early World Bank green bond issuance have already spread so that 80-90pc of green bonds are now independently reviewed, Kidney said at the NEXT conference, allowing issuance to grow even as broader industry standards remain unsettled.

The market for green bonds could encompass a significant part of the estimated $1 trillion/yr required in capital to fund renewable and clean energy sources if current 2050 emissions goals hold, head of Commodity Research Nick Stansbury at asset manager Legal & General Investment Management said. The more clear pricing on carbon becomes, the more companies can "start getting capital markets moving properly," Stansbury said at the NEXT conference.

While the appetite for green bonds is significant and growing among buyers of risk, the absence of a large secondary or tertiary trading market remains a headwind for financial market participants, Katherine Spector of ProSpector Energy Advisors told Argus.

Holders of green bonds need pricing from those markets to benchmark and model their own performance, she noted, and, in the absence of a widely accepted carbon price, building that more liquid green bond market remains challenging.

"An active and liquid secondary market would then support exchange traded funds and other investment products available to a larger class of investors," Spector said. "That creates a feedback loop, prompting more demand in the primary market."

The prospects for a national US carbon price, much less a single global price, remain elusive. But regulators at federal and state agencies have begun to issue guidance that proposes pricing approaches and market participants told Argus they are looking at ways to use those models in internal pricing that could enable expanded green bond transactions and issuance.

Additionally, the start president-elect Joe Biden's administration could quickly trigger a flow of new transaction data that could underpin growing issuance of green bonds. As much as $40bn in existing loan authorizations has been held at the Department of Energy for renewable and low-carbon energy projects, and bankers involved in those projects say they expect release of that federal funding within days of the new administration beginning. The Biden administration has committed to a much larger cross-government approach to clean energy infrastructure backed by significant new spending, but the fate and timing of those broader plans remains unclear for now.


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13/06/25

Exomad Green starts building Bolivian biochar plant

Exomad Green starts building Bolivian biochar plant

London, 13 June (Argus) — Bolivian biochar producer Exomad Green has started building a 128,000 t/yr biochar production plant in the country's Guarayos region, which it expects to achieve 320,000 t/yr of CO2 removal (CDR) once fully operational. The facility will be developed in two phases. Half of the total capacity will be developed in phase one, which is scheduled to be fully operational by mid-2026, with the second phase expected to start in 2026. Exomad did not provide a timeline for the scheduled end of the latter phase. The firm plans to distribute biochar to indigenous communities and farmers to restore degraded soils, enhance food production and improve resilience to climate stress, through its "biochar donation program" it said, without specifying what share of the end product would be allocated for this program. Exomad signed a 10-year biochar CDR agreement with technology giant Microsoft to remove 1.24mn t of CO2 in late May. The contract has embedded digital monitoring, reporting and verification carried by Germany-based Carbonfuture to enable third-party verification and certification under crediting platform Puro.earth's biochar methodology. The parties had previously also signed a deal for 32,000t of biochar CDR credits in December 2023. Exomad estimates it had sequestered over 120,000t of CO2 by April through its biochar operations. The firm already operates two biochar plants in Concepcion and Riberalta, each with 60,000 t/yr of capacity. The company uses hardwood forestry residues as feedstock to produce biochar with up to 86pc fixed carbon content through pyrolysis. Exomad Green is a unit of Exomad, which is the largest wood exporter in Bolivia. By Erisa Senerdem Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Australia allows emissions reporting for biomethane, H2


13/06/25
News
13/06/25

Australia allows emissions reporting for biomethane, H2

Sydney, 13 June (Argus) — The Australian government will enable companies to report scope 1 emissions from the consumption of biomethane and hydrogen, which will need to be backed by eligible renewable gas certificates, it announced today. Companies will be able to prove that the gas they receive from the natural gas network and consume in a reporting year contains an amount of renewable gas, as represented by renewable gas certificates retired or completed by them or on their behalf, adjusted for losses, the Department of Climate Change, Energy, the Environment and Water (DCCEEW) said on 13 June. The new product guarantee of origin (PGO) certificates registered under the guarantee of origin (GO) scheme, as well as the renewable gas guarantee of origin (RGGO) certificates issued under the GreenPower Renewable Gas Certification (RGC), will both be allowed. Any gas sourced from the natural gas network that is not covered by the new certificate-backed loss-adjusted amount must be reported as natural gas, the DCCEEW said. The changes are part of updates to the National Greenhouse and Energy Reporting (NGER) scheme, which is used to measure and report greenhouse gas (GHG) emissions and energy production and consumption. These are the latest changes following the implementation of the recommendations made at the end of 2023 by Australia's Climate Change Authority (CCA), which reviews the NGER scheme every five years. The market-based reporting allowing companies to report the scope 1 emissions benefits from their renewable gas purchases will start from 1 July 2025, and be applicable from the July 2025-June 2026 financial year onwards. They will affect NGER scheme reports to be submitted by corporations by 31 October 2026. The updates also include amendments to support the reclassification of hydrogen as a fuel type. Hydrogen was previously classified in the NGER scheme as an energy commodity. The DCCEEW will monitor the uptake of biomethane as a feedstock for ammonia and hydrogen production and may revisit some technical rules in future annual NGER scheme updates, it said. Potential impact on oil and gas facilities Other changes announced on 13 June include updates to the emission factors used in two methods for gas flared in oil and natural gas operations. Some submissions to a public consultation raised concerns about the potential overestimation of methane emissions resulting from the assumption that flare gas is 100pc methane, and implications of the proposed emission factors on facilities covered by the safeguard mechanism, the DCCEEW said. The Clean Energy Regulator has the discretion to vary the facility's baseline to accommodate the regulatory change if the revised factors have a material impact on emissions reported by a facility covered by the safeguard mechanism, it said. Facilities under the oil and gas extraction sector received a combined 3.07mn safeguard mechanism credits (SMCs) in the July 2023-June 2024 financial year as their covered scope 1 emissions were below their baselines. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EPA draft biofuel blend mandate expected Friday: Update


12/06/25
News
12/06/25

EPA draft biofuel blend mandate expected Friday: Update

Updates with changes throughout New York, 12 June (Argus) — President Donald Trump's administration plans to release draft biofuel blend mandates for 2026 and 2027 on Friday, according to three people familiar with the matter. The draft quotas, in addition to a separate final rule cutting cellulosic biofuel mandates for last year, exited White House interagency review on Wednesday, the last step before major regulations can be released. The Trump administration has meetings with legislative stakeholders on Friday morning ahead of the public release, three people said. Previously scheduled meetings through the end of the month as part of the interagency review process appear to have been cancelled, another signal that the rules' release is imminent. The Environmental Protection Agency (EPA) has said it wants to get the frequently delayed Renewable Fuel Standard program back on its statutory timeline, which would require volumes for 2027 to be finalized before November this year. Any proposal will have to go through the typical public comment process and could be changed. EPA said the rules will be posted on its website once they are signed by Lee Zeldin, the agency's administrator. A coalition of biofuel-producing groups and feedstock suppliers, including the American Petroleum Institute, has pushed EPA to set a biomass-based diesel mandate of 5.25bn USG for 2026, hoping that a record-high target will support biorefineries that have struggled this year. Many plants have idled or run less recently, as uncertainty about future blend mandates, the halting rollout of a new clean fuel tax credit, and tariffs that up feedstock costs all hurt margins. US senator Chuck Grassley (R-Iowa) said Thursday that closed biodiesel plants in his state needed a 5.25bn mandate to reopen. Meanwhile, a coalition of independent and small refiners that have long lamented the costs of the program wrote to EPA this week asking for less-aspirational future mandates, including for the conventional category mostly met by corn ethanol. RIN markets were volatile today, trading higher in the morning before slipping lower on fears the mandates would not meet industry expectations. Current year ethanol D6 RINs traded as high as 99¢/RIN before falling as low as 90¢/RIN. Current year biomass-based diesel D4 RINs ended Thursday at 102.5¢/RIN, equal to their close the prior day. Small refinery exemptions loom Zeldin told a House subcommittee last month the agency wanted "to get caught up as quickly as we can" on a backlog of small refiner requests for program exemptions. Courts took issue with EPA's exemption policy during Trump's first term and again during President Joe Biden's tenure, leaving officials now with dozens of waiver requests covering 10 compliance years still pending. It is unclear whether the rule will provide much clarity on EPA's plans for program waivers, but biofuel groups have worried that widespread exemptions would curb demand for their products. The price of Renewable Identification Number (RIN) credits used for program compliance have been volatile this year on rumors about these exemptions, which EPA has called market manipulation. In both the Trump and Biden administrations, EPA estimated future exempted volumes when calculating the percentage of biofuels individual refiners had to blend, effectively requiring those with obligations to shoulder more of the burden to meet high-level volume targets. The agency could continue that approach, but it would be more legally treacherous for the agency to similarly "reallocate" exempted volumes from past years into future standards, lawyers said. EPA by law also has to consult on exemption decisions with the Department of Energy, which a person familiar said was "still going through the scoring process" for assessing some small refinery applications, making quick resolution of the issue unlikely. Unresolved court cases, including a Supreme Court case about the proper venue for small refinery waiver disputes, could also give regulators pause until they know more. Tax credit clarity expected soon Senate committees this week have been releasing their versions of key parts of the major Republican spending bill, and the Senate Finance Committee is expected to do so soon, potentially as early as Friday according to people familiar. The incentive is crucial for biofuel production margins and thus for the viability of EPA mandates too. The version that passed the House last month would extend the "45Z" clean fuel production credit through 2031, bar regulators from considering indirect land use emissions, and restrict eligibility to fuels from North American feedstocks. While various ideas have circulated this year, lobbyists expect the Senate to preserve the general structure of the credit, which throttles benefits based on carbon intensity, rather than reinvent a new subsidy. Still, some Republicans have expressed concern with the House's phaseout of tax credit "transferability", which benefits smaller companies without much tax liability. And major oil refiners with renewable diesel plants reliant on Asian used cooking oil and South American tallow have lobbied for more flexibility around foreign feedstocks. Any changes that up the credit's costs could be controversial too among conservatives worried about the bill's impacts on a mounting federal budget deficit. And the complex tax credit will ultimately need final regulations from the US Department of Treasury clarifying eligibility. At a Senate hearing Thursday, Treasury secretary Scott Bessent said that the Trump administration planned to implement the credit in a way to "not allow for foreign actors to have a back door into the program." By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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Brazil backs R32mn to counter wildfires in Amazon


12/06/25
News
12/06/25

Brazil backs R32mn to counter wildfires in Amazon

Sao Paulo, 12 June (Argus) — Brazil opened a public call to finance R32mn ($5.7mn) to combat wildfires in the Amazon rainforest and in the central-western Pantanal biome. The resources come from Brazilian environment ministry's FNMA fund and the federal collective rights' fund FDD, which is under the justice and public security ministry's umbrella. Projects submitted must be between R800,000-1mn and must be finished in up to two years, according to the government. Projects regarding machinery, equipment and fire-adapted light vehicle acquisitions are eligible. The investment does not comprise construction projects. The initiative aims to counter environmental damages from wildfires. Brazil is working to eliminate deforestation — both legal and illegal — by 2030, in an effort to meet its emissions reductions targets under the Paris climate agreement. Deforestation is one of Brazil's flagship issues for the UN Cop 30 summit , which it will host in northern Para state in November this year. The Amazon biome lost over 774,000ha to wildfires in the first quarter, a 72pc drop from a year earlier, while it accounted for almost 52pc of burnt areas in March. Burnt areas in the Pantanal biome, or tropical wetland, fell by 86pc in the first quarter to 10,900 hectares. By Maria Frazatto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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EPA readies new biofuel blend mandate proposal


12/06/25
News
12/06/25

EPA readies new biofuel blend mandate proposal

New York, 12 June (Argus) — President Donald Trump's administration is close to releasing two regulations informing oil refiners how much biofuel they must blend into the conventional fuel supply. The two rules — proposed biofuel blend mandates for at least 2026 and most likely for 2027 as well as a separate final rule cutting cellulosic fuel mandates for last year — exited White House review on Wednesday, the last step before major regulations can be released. Previously scheduled meetings as part of the process appear to have been cancelled, another signal that the rules' release is imminent. The Environmental Protection Agency (EPA) has said it wants to get the frequently delayed Renewable Fuel Standard program back on its statutory timeline, which would require volumes for 2027 to be finalized before November this year. Any proposal will have to go through the typical public comment process and could be changed. A coalition of biofuel-producing groups and feedstock suppliers, including the American Petroleum Institute, has pushed EPA to set a biomass-based diesel mandate of 5.25bn USG for 2026, hoping that a record-high target will support biorefineries that have struggled this year. Many plants have idled or run less recently, as uncertainty about future blend mandates, the halting rollout of a new clean fuel tax credit, and tariffs that up feedstock costs all hurt margins. EPA administrator Lee Zeldin also told a House subcommittee last month the agency wanted "to get caught up as quickly as we can" on a backlog of small refiner requests for program exemptions. Courts took issue with EPA's exemption policy during Trump's first term and again during President Joe Biden's tenure, leaving officials now with dozens of waiver requests covering multiple compliance years still pending. It is unclear whether the rule will provide clarity on EPA's plans for program waivers — including whether the agency will up obligations on other parties to make up for exempt small refiners — but biofuel groups have worried that widespread exemptions would curb demand for their products. The price of Renewable Identification Number (RIN) credits used for program compliance have been volatile this year on rumors about these exemptions, which EPA has called market manipulation. RIN trading picked up and prices rose on the news as Thursday's session began. Bids and offers for 2025 ethanol D6 RINs, the most prevalent type currently trading, began the day at 96¢/RIN and 98¢/RIN, respectively. Deals were struck shortly after at 98¢/RIN and 99¢/RIN, with seller interest at one point reaching 100¢/RIN — well above a 95.5¢/RIN settle on Wednesday. Biomass-based diesel D4 RINs with concurrent vintage followed the same path with sellers holding ground as high as 107¢/RIN. By Cole Martin and Matthew Cope Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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