Sweden is fighting a draft European climate measure that it says could harm its world-beating green bond market. The European Commission, which wants to steer investors to socially and environmentally sustainable assets, is proposing that only buildings certified as super-energy efficient by national authorities be included in its taxonomy. Being excluded would make financing more expensive.
But national energy requirements differ and since Sweden imposes some of Europe’s toughest, the EU’s framework would ultimately dramatically shrink the pool of Swedish assets that could be funded with green bonds. The Swedish Bankers’ Association says the fallout could leave just 1% of the total eligible, compared with as much as 20% in other countries. Sweden isn’t alone in opposing the draft definition, but it would be among the hardest hit.
“The requirements for energy classes differ significantly between member states,” Swedish Financial Markets Minister Per Bolund said in an email. “The effect of this is a very heterogeneous classification of buildings and lack of transparency.”
“On average these countries have tougher building regulations and EPC A thresholds, which means that the benchmark for what is being considered ‘sustainable’ or ‘green’ will also become more difficult to reach,” Volt and Toth said in an email.