German E.ON Launches EU-Compliant Green Bond
German utility E.ON presented its Green Bond Framework to international institutional investors March 1, saying it was fully in line with the criteria of the European Union taxonomy for sustainable economic activities. This is a difference from the 2019 framework. The taxonomy, currently in draft form, defines which economic activity is environmentally sustainable and thus sets a Europe-wide standard for sustainable investments.
The taxonomy, which considers the mass of CO2 produced to generate a kWh of electricity, comes down hard on most forms of gas-fired generation and possibly blue hydrogen as well, although the storm of opposition that the consultation on its taxonomy provoked might mean a rethink before final publication.
E.ON’s Green Bond Framework covers energy networks and customer solutions businesses. Power grids form the central platform for decarbonisation in Europe and are therefore EU taxonomy-compliant, with the exception of grid connections for CO2-intensive generation plants.
E.ON will first include its German and Swedish power grids, which already allow renewable energy to be fed into the grid to a very large extent. From the Customer Solutions segment, projects such as highly efficient combined heat and power solutions that E.ON develops for industrial or municipal customers, such as in its Swedish Medicon Village project, shall be included. Investors thus have the opportunity to participate specifically in the (re-)financing of sustainable projects of the E.ON Group that comply with the Green Bond Framework.
E.ON said green financing is a core element in its funding strategy and its updated Green Bond Framework allows green bonds to become an integral part of our financing mix. It expects to cover more than half of its annual funding requirements with green bonds going forward.
"Fostering the digitalisation of grid infrastructure allows us to manage our existing grids at high efficiency and at the same time expand our networks in a resource-efficient way. With our new Green Bond Framework, we give investors the opportunity to support us in making our energy systems cleaner and smarter and allowing us to supply our customers with green energy more efficiently.”