Green bonds take big lead over fossil-fuel debt deals

economictimes.indiatimes.com:

debt markets for environmentally friendly projects than they are for fossil fuels. Almost $350 billion was raised from green bond sales and loan arrangements in the first half of this year, compared with less than $235 billion of oil, gas and coal-related financing, according to data compiled by Bloomberg. The ratio was roughly $300 billion green versus $315 billion fossil fuels in the same period last year.

From a climate perspective, however, «it's too early to say whether this is good news,» said April Merleaux, research manager at the environmental nonprofit Rainforest Action Network. Much of this year's green issuance is from financial institutions, governments, a handful of utilities and comparatively few renewables companies, and it's unclear precisely how all these funds are being used and what this means for the energy transition, Merleaux said. «Transparency is still a major issue in this market,» she said.

Take RWE AG. The German utility has raised $1.1 billion this year selling green bonds. The company says the proceeds are earmarked for solar and wind projects.

But RWE is Europe's biggest greenhouse gas emitter and a major coal developer, Merleaux said. «The energy transition unequivocally needs more financing, but I'm not convinced that financing for renewables should be going to companies that are opening new coal mines at the very same time,» she said. Still, the debt markets are vastly different than they were in, say, 2020 when the Covid-19 pandemic emerged.

This may provide an explanation for why green bonds are topping their dirtier brethren of late. The amount of fossil-fuel financing that year was more than triple what companies and governments raised from green bonds and loans. Now, most