auctusESG | Insights | August H2 2024
Data dashboard
A recent study by the Potsdam Institute for Climate Impact Research alongside Mercator Research Institute on Global Commons and Climate Change (MCC) evaluated 1,500 climate policies from 41 countries, revealing that only 63 (less than 5%) significantly reduced carbon emissions. The study emphasizes that effective climate strategies often require a mix of policies rather than standalone measures. Key findings include the importance of sector-specific approaches and the differing needs of high- and low-income countries. Notably, taxation emerged as a powerful tool across all sectors. The research suggests that adopting best practices could close 26-41% of the emissions gap needed to meet the Paris Agreement by 2030.
Read more here.
PIK - Potsdam Institute for Climate Impact Research and Mercator Research Institute on Global Commons and Climate Change (MCC) gGmbH
News roundup
India releases policy advisory targeting 2050 to achieve zero-emission trucks (ZETs)
India aims to achieve a complete transition to zero-emission trucks (ZETs) by 2050, with an anticipated 17 million trucks on the roads. This initiative is part of the "Indian Zero Emission Trucking Policy Advisory," which emphasizes the urgency of reducing environmental threats posed by freight transport. To support this goal, the government has outlined 30 policy interventions designed to accelerate truck electrification. Achieving this transition is crucial for India to meet its Net Zero target by 2070, requiring a robust ecosystem of technical expertise and systematic policies inspired by successful international models.
SEBI to expand sustainable finance with new ESG instruments and green securitisation framework
The Securities and Exchange Board of India (SEBI) has expanded its sustainable finance framework by introducing new financial instruments, including social bonds, sustainable bonds, and sustainability-linked bonds, in addition to existing green debt securities. This initiative aims to enhance flexibility for issuers in funding projects aligned with ESG goals, addressing the funding gap for SDGs. SEBI's proposal also includes sustainable securitised debt instruments and emphasizes transparency through initial and continuous disclosures. Public comments on the consultation paper are invited until September, marking a significant step towards aligning with global sustainable finance standards.
Read more here. Outlook Publishing (India) Pvt. Ltd.
Colombia issues its first biodiversity bond
BBVA Colombia, in partnership with the IFC - International Finance Corporation , is set to issue a $50 million "biodiversity bond," marking a global first. This innovative bond will finance projects focused on natural forest regeneration, mangrove conservation, climate-smart agriculture, and wildlife habitat restoration. Unlike traditional green bonds, this bond will track biodiversity impacts using specific indicators, such as the number of native species and managed wetlands. It aims to support small, medium, and large enterprises as well as public institutions in Colombia.
Read more here. Carbon Pulse Thomas Cox
Australia greenlights its largest solar farm initiative
Australia has approved the Australia-Asia Power Link (AAPowerLink), a monumental project set to export renewable energy to Singapore via a 4,300 km undersea cable. This initiative, spearheaded by SunCable, aims to construct the world's largest solar farm in the Northern Territory, generating between 17-20 GW of electricity, complemented by a battery storage capacity of 36-42 GWh. The project, costing approximately $13.5 billion, is expected to begin supplying electricity by the early 2030s, significantly contributing to decarbonization efforts in both Australia and Singapore.
Read more here. Australian Government
IFC and Jordan Ahli Bank launched first locally issued sustainability bond in Jordan
IFC - International Finance Corporation has subscribed $50 million to Jordan's first locally issued sustainability bond by Jordan Ahli bank , aimed at boosting climate finance for SMEs, supporting women-led businesses, and creating up to 10,000 jobs. The bond aligns with Jordan's Economic Modernization Vision and the The World Bank Group 's climate goals, addressing the financing gap for SMEs in Jordan, which represent over 90% of enterprises but struggle with access to loans. Supported by IFC's Global SME Finance Facility, this initiative marks a significant step towards advancing sustainable finance and economic inclusion in the country.
Read more here.
Australia Senate passes mandatory climate disclosure law
The Australian Senate has passed a bill introducing a mandatory climate reporting bill for large and medium-sized companies. This bill is part of the government’s broader Sustainable Finance Roadmap that aims to support the transition to a net-zero economy by mobilising private capital. This marks a significant step towards establishing a climate risk disclosure framework in Australia. The new legislation aligns with the IFRS Foundation ’s International Sustainability Standards Board (ISSB) , requiring companies to disclose climate-related risks, opportunities, and greenhouse gas emissions across their value chains.
Read more here. ESG Today Mark (Moshe) Segal
Spotlight
Green hydrogen market
Green hydrogen has been gaining traction as a crucial component in the global energy transition journey. Produced by electrolysis using renewable energy sources, it is seen as a much cleaner alternative to traditional fossil fuels. The global demand for green hydrogen is projected to reach between 150-500 million metric tonnes per year by 2050, depending on climate ambitions and technological advancements. BloombergNEF estimates that 390 million tonnes of hydrogen would be required per year globally in order to decarbonise hard-to-abate sectors such as steel production, maritime shipping and heavy industry. ?
Why has its popularity increased?
Green hydrogen is popular due to its potential to significantly reduce carbon emissions in industries that are challenging to electrify. It offers a zero-emission solution for sectors like transportation, chemical production, and power generation.?Additionally, countries are setting ambitious targets to boost green hydrogen production as part of their net-zero commitments. For instance, the European Union aims to produce 10 million metric tonnes of carbon-free hydrogen by 2030.
What are the roadblocks?
Despite its potential, the green hydrogen market faces several supply-side challenges:
Further financing remains a critical hurdle for the green hydrogen sector.
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Way forward
There is no doubt that green hydrogen holds immense potential to transform the energy landscape and contribute to global decarbonization efforts. However, supporting strategies are needed to address supply-side gaps and financing challenges, thereby capitalising on the benefits.
National?governments can play a pivotal role by providing policy support and financial incentives to reduce production costs and encourage private sector investment. For example, India's National Green Hydrogen Mission aims to make the country a global hub for green hydrogen production. The government has launched a $2.4 billion incentive program to boost green hydrogen production and electrolyser manufacturing, offering subsidies to cover production costs and stimulate demand. ?
Further, collaborations between public and private sectors can help mobilize the necessary resources for infrastructure development and project financing. Continued investment in research and development can drive down production costs and improve the efficiency of green hydrogen technologies. ?Innovations like the UK’s Dolphyn Hydrogen process, which combines electrolysis, desalination, and hydrogen production on a floating wind platform, are examples of technological advancements aimed at reducing costs.
International cooperation can facilitate knowledge sharing and standardization, helping to scale up green hydrogen production and distribution globally. Engaging with multilateral organizations and leveraging international climate finance mechanisms can provide the necessary support and resources for implementing green hydrogen projects.
Upcoming featured events
Launch webinar: Climate transition roadmap for banks in emerging markets – 3rd September 2024
The webinar aims to launch auctusESG and Asian Bankers Association ’s joint publication titled ‘Climate transition: A roadmap for banks in emerging markets', which?presents a prescriptive guidance framework to help banks in emerging and developing markets to plan, develop, and implement a holistic climate transition strategy. While these markets are at varying stages in their development journey, most banks in these regions are at a nascent phase in their climate transition journey. The report aims to serve as a practical roadmap for banks outlining key activities for navigating this critical undertaking.?This webinar aims to unpack the challenges and opportunities that banks in emerging markets face when it comes to initiating and achieving a climate transition in their operations and their business.
Speakers:
Register here.
IEEFA Energy Finance 2024: Accelerating the Energy Transition in Asia – 2nd – 4th September
Institute for Energy Economics and Financial Analysis (IEEFA) ’s 3-day long conference in Kuala Lumpur aims to bring together energy and finance experts across the corners of the world to shed light on ideating, designing and implementing effective solutions in Asian energy markets. ?
Namita Vikas , Founder and Managing Director, auctusESG would be speaking at IEEFA’s conference on the theme, “Uniting the Region: Inflection Points in Asia’s Energy Transition at Energy Finance 2024” that is to be held on September 4th, 2024. Namita would be accompanied by experts from Asia and around the globe in examining key milestones in Asia’s renewable energy development and discuss upcoming inflection points and potential shifts that could expedite the region's clean energy transition. You could register for this event here.?
Speakers:
Insights digest
auctusESG thought leadership
Market trends and reports
ECB released a working paper on banks penalizing climate risk in lending, especially those committed to low-carbon targets, and how monetary policy influences climate risk premiums. The report highlights that banks differentiate rates based on clients’ future emission commitments, with committed banks offering better terms. Another highlight of the report emphasizes on monetary policy impacts on climate risk premiums: tighter policies increase premiums for high-emission firms while lessening the impact on those committed to reducing emissions.
Listen here. Featuring Michael Disabato and Sylvain Vanston .
News roundup further analysis
Read more here. Climate Policy Initiative - India , NITI Aayog , and ITF - International Transport Forum
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