Land Transport Criteria
The Land Transport Sector Eligibility
Criteria of the Climate Bonds
Standard & Certification Scheme
Updated: April 2023

NOTE: These Criteria can be used to certify Use-of-Proceeds Instruments and Assets, and also
in some circumstances, Sustainability-Linked Debt Instruments and Entities per the
Climate Bonds Standard v4.0

Revision

Date

Summary of Changes

Rev. 2.2

13 April 2023

Revisions to enable Entity Certification and SLD Certification in line with release of CBS v4.0

Rev. 2.1

August 2022

Clarification of years new thresholds are applicable (viz. passenger transport thresholds
become zero from 2026 onwards). Clarification that Hydrogen vehicles are eligible as
opposed to Biofuel vehicles.

Rev. 2.0

October 2020

Lowering passenger transport emissions thresholds, lower acceptable percentage of rail
freight being fossil fuels (now 25%), clearer exclusions of biofuel and fossil fuel vehicles,
clarify fossil fuel transport exclusions, inclusion of zero emissions supporting vehicles inother sectors, clearer requirements for emissions reductions for new interurban rail,
addition of coaches into scope, and changes to layout to align with other sector criteria.

Rev. 1.0

February 2016

First publication of original Criteria

Climate Bonds Initiative - Land Transport Criteria Document
Updated: April 2023

Acknowledgements
Climate Bonds gratefully acknowledges the Technical and Industry Working Group members who
provided their time and expertise during the development of these Criteria. Members are listed inAppendix A: at the end of this document.
Special thanks go also to Peter Anderson of the European Investment Bank (EIB) and Andreas Barkmanof the European Environment Agency (EEA) for their kind input and engagement.

Appendix

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Definitions
Applicant: The term or name for any potential bond issuer, or non-financial corporate entity that might seek certification under thisCriteria.
Certified Entity: The entity or part thereof which is being certified under the Climate Bonds Standard. Currently, Entity Certification
is limited to non-financial Entities or segregated segments thereof, for which the Climate Bonds Initiative has Climate Bonds
Standard Sector Criteria for Entity Certification.
Climate Bonds Initiative (Climate Bonds): An investor focused not-for-profit organisation, promoting large-scale investments thatwill deliver a global low carbon and climate resilient economy. Climate Bonds seeks to develop mechanisms to better alignthe interests of investors, industry and government to catalyse investments at a speed and scale sufficient to avoid dangerous
climate change.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them to identify green bonds theproceeds of which are being used to deliver climate change solutions. This may be through climate mitigation impact and/or
climate adaptation or resilience. The CBS is made up of two parts: the parent Climate Bonds Standard and a suite of sector
specific eligibility Criteria. The parent standard covers the certification process and pre- and post-issuance requirements for
all certified bonds, regardless of the nature of the capital projects. The Sector Criteria detail specific requirements for assets
identified as falling under that specific sector. The latest version of the CBS is published on the Climate Bonds website.
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents $34 trillion of assets undermanagement. The CBSB is responsible for approving (i) Revisions to the CBS, including the adoption of additional sector
Criteria, (ii) Approved verifiers, and (iii) Applications for Certification of a bond under the CBS. The CBSB is constituted,
appointed, and supported in line with the governance arrangements and processes as published on the Climate Bonds website.
Climate Bond Certification: allows the applicant to use the Climate Bond Certification Mark in relation to that bond. Climate Bond
Certification is provided once the independent CBSB is satisfied the bond conforms with the CBS.
Critical interdependencies: The asset or activity’s boundaries and interdependencies with surrounding infrastructure systems.
Interdependencies are specific to local context but are often connected to wider systems through complex relationships that
depend on factors ‘outside the asset fence’ that could cause cascading failures or contribute to collateral system benefits.
Green Bond: A green bond is a bond of which the proceeds are allocated to environmental projects or expenditures. The term
generally refers to bonds that have been marketed as green. In theory, green bonds proceeds could be used for a wide varietyof environmental projects or expenditures, but in practice they have mostly been earmarked for climate change projects.
Grid assets and projects: Assets and projects relating to the transmission and distribution, and storage of electricity.
Industry Working Group (IWG): A group of key organisations that are potential applicants, verifiers and investors convened by
Climate Bonds. The IWG provides feedback on the draft sector Criteria developed by the TWG before they are released for
public consultation.
Investment Period: The interval between the bond’s issuance and its maturity date. Otherwise known as the bond tenor.
Sustainability-Linked Debt (SLD): Any debt instrument for which the financial and structural characteristics can vary depending onwhether the issuer achieves predefined Sustainability/ ESG objectives. Such objectives are measured through predefined KPIs
and assessed against predefined performance targets. Proceeds of SLD are intended to be used for general purposes.
Technical Working Group (TWG): A group of key experts from academia, international agencies, industry and NGOs convened by
Climate Bonds. The TWG develops the Sector Criteria - detailed technical criteria for the eligibility of projects and assets aswell as guidance on the tracking of eligibility status during the term of the bond. Their draft recommendations are refined
through engagement with finance industry experts in convened Industry Working Groups (see below) and through public
consultation. Final approval of Sector Criteria is given by the CBSB.
Transport assets and projects: Assets and projects relating to the production of private and/ or public vehicles, and/ or thedevelopment of associated infrastructure, logistics and ICT.

Appendix

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Table of Contents
Definitions

3

1

5

2

Introduction
1.1

The Climate Bonds Standard

5

1.2

Environmental scope of the Land Transport Criteria

5

1.3

What can be certified under the Land Transport Criteria

5

1.4

Documents supporting these Criteria5

1.5

Revisions to these Criteria

6Land Transport activities in scope and associated Certifications
2.1

3

4

Alignment with other Sector Criteria

Eligibility Criteria for Land Transport

6
12
13

3.1

Overview

13

3.2

Cross cutting eligibility emissions thresholds and criteria

13

3.2.1

Automatic eligibility

13

3.2.2

Universal emissions thresholds

13

3.2.3

Methodological notes on use of these thresholds for determining compliance

14

3.2.4

Exclusion of dedicated fossil fuel transport

15

3.2.5

Exclusion of biofuel vehicles

15

3.2.6

Independent project appraisals for new interurban rail transport

16

3.3

Requirements for passenger cars and commercial vehicles

17

3.4

Requirements for public passenger transport by road

18

3.5

Requirements for freight transport by road

19

3.6

Requirements for passenger rail rolling stock

20

3.7

Requirements for railway networks and freight rail rolling stock

21

3.8

Miscellaneous vehicles for other sectors

22

3.9

Requirements for infrastructure for low carbon transport

22

Additional notes for Certification of Entities and Sustainability-Linked Debt

23

List of Tables
Table 1: Illustrative eligible certifications under the Land Transport Criteria
Table 2: Assets or projects partially or wholly covered by other sector criteria
Table 3: Universal emissions thresholds for passenger and freight activity

7
12
13

List of Appendices
Appendix A: TWG and IWG members

Appendix

24

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1 Introduction
1.1 The Climate Bonds Standard
Investor demand for climate bonds is strong and is expected to increase in line with the delivery of quality products into the market.
However, investor concerns about the credibility of green labelling are also growing. Standards, assurance & Certification will beessential to improve confidence and transparency, which in turn will enable further strong growth in the market.
Today, the Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides a clear signal to investors
and intermediaries on the climate integrity of Certified Climate Bonds. Proposals are currently under consultation to also expand
certification to entities with climate integrity.
A key part of the Standard is a suite of sector-specific eligibility Criteria. Each sector-specific Criteria sets climate change benchmarks
for that sector that are used to screen debt instruments, assets and/ or entities, so that only those that have climate integrity, either
through their contribution to climate mitigation, and/or to adaptation and resilience to climate change, will be certified.
These sector-specific Criteria are determined through a multi-stakeholder engagement process, including TWG and IWG, convened
and managed by Climate Bonds, and are subject to public consultation. Finally, they are reviewed and approved by the Climate
Bonds Standard Board (CBSB).
The second key part of the Climate Bonds Standard (CBS) is the overarching Climate Bonds Standard v4.0. This documents the
cross-sectoral criteria all certified instruments/ assets/ entities must meet, in addition to meeting the sector specific Criteria.

1.2 Environmental scope of the Land Transport Criteria
Currently, the Land Transport Sector Criteria address climate change mitigation only.

1.3 What can be certified under the Land Transport Criteria
Use-of-Proceeds1 instruments, Sustainability-Linked Debt Instruments, Assets and Entities relating to various land transport
activities and assets can be Certified using these Land Transport Criteria. Table 1 below provides an overview of which assets andactivities are eligible for which types of Certification and a forward guide to any land transport-related eligibility criteria for those
Certifications. Additional overarching guidance on Sustainability-Linked Debt and Entity Certification is given in Section 4.
See also the Climate Bonds Standard v4.0 for any cross sectoral requirements for Use-of-Proceeds, Sustainability-Linked Debt, Assetor Entity Certification. These cross sectoral requirements must be met in addition to the land transport-specific requirements
described in this document.

1.4 Documents supporting these Criteria
Land Transport-specific information to support Applicants and Verifiers is available at Low Carbon Transport as follows:•

Background Paper that details why the criteria were chosen

In addition, the following cross cutting information to support Applicants and Verifiers is available as follows:•

The Climate Bonds Standard v4.0: contains the requirements of the overarching CBS

1 Use-of-Proceeds (UoP) is used as shorthand throughout this document for a variety of targeted finance instruments, including green l oans, repos, and asset-backed

securities. Annex 1 of the Climate Bonds Standard v4.0 details the full list of instruments that can be certified.
Appendix

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Climate Bonds Initiative - Land Transport Criteria Document
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The Climate Bonds Standard v4.0 Entity and Sustainability-Linked Debt Checklist documents: provides further informationon the cross-sectoral requirements for Entity and Sustainability-Linked Debt Certification respectively.

For more information on Climate Bonds and the Climate Bonds Standard and Certification Scheme, see www.climatebonds.net.

1.5 Revisions to these Criteria
These Criteria will be reviewed three years after launch, or potentially earlier if the need arises, at which point the TWG will takestock of issuances that arise in the early stages and any developments in improved methodologies and data that can increase theclimate integrity of future bond issuances. As a result, the Criteria are likely to be refined over time, as more information becomes
available. However, certification will not be withdrawn retroactively from bonds certified under earlier versions of the Criteria.

2 Land Transport activities in scope and associated Certifications
To summarise, these Criteria can variously be used to certify Use-of-Proceeds Instruments, Sustainability-Linked Debt Instruments,
Assets and Entities relating to:
•
•
•
•
•
•
•
•

Passenger cars and commercial vehicles
Public passenger transport by road
Freight transport by road
Passenger rail rolling stock
Freight rail rolling stock
Railway networks and lines
The manufacture of miscellaneous vehicles for other sectors
Infrastructure for low carbon transport

Table 1. provides a summary of what is eligible for what Certification and signposts to any relevant Criteria detailed in Section 3.
To guide the interpretation of the criteria requirements, Table 1 provides signposting as follows:
A green circle indicates these proceeds/ assets/ activities and any associated debt
instruments (if any) when fully described and documented, are automatically eligible for
Certification.
An orange square indicates that the eligibility of these proceeds/ assets/ activities andany associated debt instrument is conditional on meeting specific criteria.
A red triangle indicates that these proceeds/ assets/ activities and any associated debt
instrument are not eligible for certification under any circumstances.

It is the Applicant’s responsibility to provide the information to prove compliance with each component of these Criteria. Verifiersmust include this information in the scope of verification.
For Use-of-Proceeds and Asset Certification, where the certification portfolio includes several separately identifiable projects,
expenditures, or groups of assets, these criteria must be met for each separately identified project or asset grouping. Applicantsshould determine these project boundaries, which may be based on geographical and/or supply chain linkages.
For Entity and SLD Certification, further guidance is given in Section 4.

Appendix

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Table 1: Illustrative eligible certifications under the Land Transport Criteria
Sub-sector within Land
Transport
Passenger cars andcommercial vehicles private and lightcommercial vehicles whichtransport private
passengers along with key
components for suchvehicles(See Section 3.3 for an overview of
the criteria for this asset category)

Mitigation Criteria(for UoP and Asset
Certification)

Example eligible proceeds/ assets/ activities•••

Electric vehicle manufacturing
Banks leasing electric vehicles
Taxi firms operating electric vehicle fleets

n/a

n/a

n/a

Section 3.2.2
Section 3.2.4

n/a

n/a

No criteria as
ineligible

n/a

n/a

Dedicated toelectric or otherzero directemission vehicles

n/a

n/a

n/a

n/a

n/a

Manufacture and upgrade and/or purchase, of key components to be used in eligible
vehicles, for example:••

Section 3.2.1

Manufacturing of high-density lithium-ion batteries
Leasing of high-density lithium-ion batteries

Manufacture and upgrade, purchase, and/or operation of other passenger and lightcommercial vehicles, for example:
Hybrid vehicle manufacturing
Banks leasing hybrid vehicles
Taxi firms operating hybrid vehicle fleets

Manufacture and upgrade, purchase and/or operation of zero direct emissions buses orcoaches, for example:•••

Electric bus manufacturing
Entities leasing electric buses
Private coach companies operating electric coach fleets

Section 3.2.1

Manufacture and upgrade and/or purchase, of key components to be used in eligible
vehicles, for example:••

Manufacturing of high-density lithium-ion batteries
Leasing of high-density lithium-ion batteries

Section 3.2.1

Manufacture and upgrade, purchase, and/or operation of other buses and coaches, forexample:Appendix

Dedicated toelectric or otherzero directemission vehicles

section 3.2.1

Manufacture and upgrade, purchase, and/or operation of fossil fuel or biofuel passenger
and light commercial vehicles (for example Internal Combustion Engine)(See Section 3.4 for an overview of
the criteria for this asset category)

Adaptation &Resilience

Manufacture and upgrade, purchase, and/or operation of zero direct emissions
passenger or light commercial vehicles, for example:•••

Public passenger transportby road - buses (urban) andcoaches (interurban)
transporting publicpassengers along with key
components for suchvehiclesMitigation Criteria(for Entity and SLD
Certification)

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Sub-sector within Land
Transport

Mitigation Criteria(for UoP and Asset
Certification)

Example eligible proceeds/ assets/ activities•••

Mitigation Criteria(for Entity and SLD
Certification)

Adaptation &Resilience

n/a

n/a

Dedicated toelectric or otherzero directemission vehicles
AND not dedicatedto the transport offossil fuels

n/a

n/a

n/a

n/a

n/a

Dedicated torolling stock andvehicles forelectric or otherzero directemission rail lines

n/a

Dedicated torolling stock andvehicles forelectric or otherzero directemission rail lines

n/aSection 3.2.2
Section 3.2.4

Public bus manufacturing
Banks leasing hybrid vehicles
Private coach companies operating hybrid vehicle fleets

Manufacture and upgrade, purchase, and/or operation of biofuel buses and coaches
No criteria as
ineligible

Freight transport by road heavy-duty vehicles used
for the purpose of moving
goods along with key
components of suchvehicles(See Section 3.5 for an overview of
the criteria for this asset category)

Manufacture and upgrade, purchase, and/or operation of zero direct emissions heavy
duty vehicles, for example:•••

Electric truck manufacturing
Banks leasing electric trucks
Logistics companies operating electric truck fleets

Section 3.2.1
Section 3.2.3

Manufacture and upgrade, purchase, and/or operation of all other heavy-duty vehicles,
for example:•••

Hybrid or biofuel truck manufacturing
Banks leasing non-electrified trucks
Logistics companies operating hybrid or biofuel truck fleets

No criteria as
ineligible

Manufacture and upgrade and/or purchase, of key components to be used in eligible
vehicles, for example:••
Passenger rail transportrolling stock - rolling stock
for the purpose oftransporting publicpassengers(See Section 3.6 for an overview of
the criteria for this asset category)

Section 3.2.1

Manufacture and upgrade, purchase, and/or operation of zero direct emissions urban railtransit rolling stock, for example:•••

Manufacturing of electrified metro rolling stock
Leasing of tramway carriages
Entities operating electrified metro rolling stock

Section 3.2.1

Manufacture and upgrade, purchase, and/or operation of zero direct emissions rollingstock, for example:••

Appendix

Manufacturing of high-density lithium-ion batteries
Leasing of high-density lithium-ion batteries

Manufacturing of electrified passenger rail rolling stock
Leasing of passenger rail carriages
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Section 3.2.1
Section 3.2.5 (ifnew interurban
rail)Climate Bonds Initiative - Land Transport Criteria Document
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Sub-sector within Land
Transport

Mitigation Criteria(for UoP and Asset
Certification)

Example eligible proceeds/ assets/ activities•

Freight rail transport rollingstock - rolling stock for the
purpose of transporting
goods

Manufacturing of diesel passenger rail rolling stock
Leasing of passenger rail diesel carriages
Train companies operating diesel passenger rail rolling stock

Section 3.2.2
Section 3.2.4
Section 3.2.5 (ifnew interurban
rail)

Manufacture and upgrade, purchase, and/or operation of zero direct emissions rollingstock, for example:•••

Manufacturing of electrified freight rail rolling stock
Leasing of freight rail carriages
Train companies operating electrified freight rail rolling stock

Section 3.2.1
Section 3.2.3(See Section 3.7 for an overview of
the criteria for this asset category)

Manufacture and upgrade, purchase, and/or operation of other freight rail rolling stock,for example:•••
Rail transport networks rail networks and lines andsupporting infrastructure
for the purpose oftransporting passengers,
goods, or a mixture of both(See Section 3.7 for an overview of
the criteria for this asset category)Construction of metro or tramway lines
Leasing of metro or subway lines
Network operators operating an urban rail transit network

Section 3.2.1

Construction and development, purchase, and/or operation of exclusively zero directemissions railway lines, for example:••

Appendix

Manufacturing of diesel passenger rail rolling stock
Leasing of diesel passenger rail carriages
Train companies operating freight rail rolling stock

Section 3.2.2
Section 3.2.3
Section 3.2.4
Section 3.2.5 (ifnew interurban
rail)

Construction and development, purchase, and/or operation of zero direct emissions
urban rail transit lines, for example:•••

Adaptation &Resilience

n/a

n/a

Dedicated torolling stock andvehicles forelectric or otherzero directemission rail lines
AND not dedicatedto the transport offossil fuels

n/a

n/a

n/a

Dedicated torolling stock andvehicles and/ or
infrastructure forelectric or otherzero directemission rail lines
AND not dedicatedto the transport offossil fuelsn/aDedicated torolling stock andvehicles and/ or
infrastructure forelectric or otherzero directn/aTrain companies operating electrified passenger rail rolling stock

Manufacture and upgrade, purchase, and/or operation of other rolling stock, forexample:•••Mitigation Criteria(for Entity and SLD
Certification)

Construction of electrified interurban railway lines
Leasing of railway contracts
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Section 3.2.1
Section 3.2.3 (iffreight transported
on the line)

Climate Bonds Initiative - Land Transport Criteria Document
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Sub-sector within Land
Transport

Example eligible proceeds/ assets/ activities•

Network operators operating a regional electrified railway network

Construction and development, purchase, and/or operation of railway lines not used
exclusively by zero direct emissions rolling stock, for example:

Miscellaneous vehicles forother sectors - mobile
vehicles that serve
purposes other thantransporting passengers or
freight along with key
components for suchvehicles•••Construction of interurban railway lines
Leasing of railway contracts
Network operators operating a regional railway network•

Manufacture, operation and leasing of zero direct emissions waste collection
vehiclesMitigation Criteria(for UoP and Asset
Certification)

Mitigation Criteria(for Entity and SLD
Certification)

Section 3.2.5 (ifnew interurban
rail)

emission rail lines
AND not dedicatedto the transport offossil fuels

Section 3.2.2
Section 3.2.3
Section 3.2.4 (iffreight transported
on the line)
Section 3.2.5 (ifnew interurban
rail)

Section 3.2.1

Manufacture of zero direct emissions miscellaneous vehicles used in other sectors, forexample:••Mobile stairways or buggies
Off-road excavators or concrete trucks used in construction

Section 3.2.1

Adaptation &Resilience

n/a

n/a

Dedicated toelectric or otherzero directemission vehicles

n/a

Dedicated toelectric or otherzero directemission vehicles

n/a

n/a

n/a

Dedicated to
dedicatedemissions freetraveln/a

Dedicated toelectric or otherzero directemission charging
infrastructuren/aManufacture of key components to be used in eligible vehicles, for example:

Appendix(See Section 3.8 for an overview of
the criteria for this asset category)••

Infrastructure for low
carbon transport - othersupporting infrastructure
and logistics that link
directly to one or moremode of transport, or
physical asset or activity.

Construction of dedicated infrastructure for other types of emissions-free travel such as
public walking and cycle lanes

Manufacturing of high-density lithium-ion batteries
Leasing of high-density lithium-ion batteries

Section 3.2.1

Section 3.2.1

Dedicated charging and alternative fuel infrastructure (when separable from fossil fuelfilling stations and garages)
Section 3.2.1

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Sub-sector within Land
Transport
These activity types might
concern system operations,or facilities that improve
the performance of suchsupporting systems.
Construction and running offacilities may still be
included in these activities.
(See Section 3.9 for an overview of
the criteria for this asset category)

Mitigation Criteria(for UoP and Asset
Certification)

Example eligible proceeds/ assets/ activities

Mitigation Criteria(for Entity and SLD
Certification)

Adaptation &Resilience

Dedicated toeligible lines andvehiclesn/aSection 3.9(Eligible on a caseby-case basis)

n/a

n/a

Section 3.9(Eligible on a caseby-case basis)

n/a

n/a

Section 3.9(Eligible on a caseby-case basis)

n/a

n/a

No criteria as
ineligible

n/a

n/a

n/a

n/a

Construction and development, purchase, and/or operation of dedicated infrastructure
for eligible rolling stock, railway lines and networks, for example:
•
•
•
•
•

section 3.9(automaticallyeligible if 100%
dedicated toeligible lines andvehicles)Train and bus stations
Inspection depots for freight rail rolling stock
Traction maintenance depots/ Motive power depots for rolling stock
Backup electricity generators
Signalling infrastructure including buildings

The implementation and integration of Information and Communication Technology (ICT)systems that improve asset utilisation, flow and modal shift, regardless of transport mode
(for example public transport information, car-sharing schemes, smart cards, roadcharging systems, etc.)
Construction of facilities for intermodal freight and development of smart freight logistics

Development and integration of transport and urban development planning systems - forexample, improvements to terminals to improve journey times

Construction of new roads, road bridges, road upgrades, parking facilities, fossil fuelfilling stations, etc.
Research and Development

Appendix

Relevant research and development, training and program implementation costs andexpenditures, where there is a definable future asset, product and/or process that can belinked to climate benefits under the Transport Criteria.

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Refer to CBS4.0

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2.1 Alignment with other Sector Criteria
Table 2 identifies which Sector Criteria should be referred to for other land transport-related assets and activities which are not in
the scope of these Criteria.
Table 2: Assets or projects partially or wholly covered by other sector criteria
Assets or Activity
Bus Rapid Transit

Applicable Sector Criteria
Bus Rapid Transit are specific systems seen in many countries whereby buses havededicated roadways and priority over other road traffic. Issuers seeking to certify
such systems in developing countries (as defined by the OECD) should use the BRT
Criteria.
Bus Rapid Transit systems in developed countries (OECD defined) should use theTransport Criteria.

Vehicles for use in forestry
projects

Vehicles used within a forest concession up to the forest gate are applicable for
Certification under the Forestry Criteria, rather than the Transport Criteria.
Vehicles used beyond a forest concession and past the forest gate must comply with
the Transport Criteria.

Forest Roads

Roads constructed through forest concessions can be Climate Bonds certified under
the Forestry Criteria so long as they meet all the necessary requirements (seeSection 3.7 of the Forestry Criteria).
Note: regular, non-forest roads are not currently eligible for certification under theTransport Criteria.

Vehicles for use inagriculture projects

Vehicles used within a farm up to the farm gate are applicable for Certification underthe Agriculture Criteria, rather than the Transport Criteria.
Vehicles used beyond a farm and past the farm gate must comply with the Transport
Criteria.

Transport sector
infrastructure - Buildings

Buildings constructed that are not used solely for the purposes of supportingtransport assets and activities (for example an office building partially operating an
ICT support system for a public transport network), must also meet the requirementsof the Buildings Criteria.
Any buildings to be constructed for the purposes of acting as dedicated supporting
infrastructure for transport activities and projects (for example a freight train depot),need only meet the Transport Criteria. This means that the assets or activities it
supports must meet the criteria.

Appendix

Renewable energy
production for powering
electrified transport

Any use of proceeds marked for financing projects and assets pertaining to renewableenergy production to generate electricity for transport assets listed in these Criteria
will be dealt with its appropriate Energy Criteria (for example, electricity generated
through solar power must meet the Solar Criteria).

Shipping vessels

Assets relating to water transport, be it passenger or freight, such as vessels, will beapplicable for certification under the Shipping Criteria.

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3 Eligibility Criteria for Land Transport
3.1 Overview
When seeking certification an issuer or verifier can first consult Table 1 to determine which criteria are pertinent for Use-ofProceeds and Asset Certification, depending on the sub-sector of land transport. The diagrams in sections 3.3 - 3.9 then provide a
broader overview of how criteria are met for each sub-sector as follows:
•
•
•
•
•
•
•

Section 3.3: Passenger cars and commercial vehicles
Section 3.4: Public passenger transport by road
Section 3.5: Freight transport by road
Section 3.6: Passenger rail rolling stock
Section 3.7: Railway networks and Freight rail rolling stock
Section 3.8: Manufacture of miscellaneous vehicles for other sectors
Section 3.9: Infrastructure for low carbon transport

In addition, Section 3.2 described the cross cutting emissions thresholds and criteria and associated methodological notes that arereferenced in many of the sub-sectoral criteria per Sections 3.3 to Section 3.9.

3.2 Cross cutting eligibility emissions thresholds and criteria
3.2.1 Automatic eligibility
All zero direct emissions transport along with key components and dedicated supporting infrastructure are automatically eligible
and therefore certifiable under the Transport Criteria.

3.2.2 Universal emissions thresholds
Table 3 presents the EU taxonomy emissions targets for p-km in 2020 through to 20252, after which (2026 onwards) they drop tozero, and IEA 2DS emissions targets for t-km in 2020 through to 20503. Supporting methodological notes are provided for additional
aid in using the thresholds.
Table 3: Universal emissions thresholds for passenger and freight activity
Emissions thresholds per year of issuanceDirect Emissions
Passenger Activity Threshold(g CO2eq per p-km)
Freight Activity Threshold(g CO2eq per t-km)

2020

2026

2030

2050

50

0

0

0

21

18

25

2 For passenger transport, the thresholds align with the EU taxonomy on sustainable finance, based off reference data that gives a benchmark for low emitting

vehicles across all modes of transport. In 2020, this is set at 50g CO 2 per p-km until 2025, after which (2026 onwards) only zero emissions vehicles (0g CO 2 per p-km)
will be eligible.
3 Mobility Model (MoMo) data, ibid, provides global stock-wide average of emissions where, to qualify in 2020, assets need to perform better than the Global Fuel

Economy Initiative (GFEI) target accounted for in the IEA 2 Degree Scenario (2DS) emission targets (50% better fuel economy for new vehicle registrations by 2030,
compared to 2005).
Appendix

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3.2.3 Methodological notes on use of these thresholds for determining compliance3.2.3.1

Methodological note 1: Using the thresholds

The threshold to be used by the issuer for certification is the starting year of the bond (year of issuance). As an example of how thethresholds should be used, a bond for rail freight issued in 2020 should meet the threshold for 2020 for the lifetime of the bond, in
this case 25g CO2 per t-km.
3.2.3.2

Methodological note 2: Fleet Averages

For bonds financing vehicle fleet operation or manufacturing, fleetwide averages cannot be used to show compliance with thethresholds. Each vehicle must meet the threshold. The only exception is for vehicle fleets that transport public passengers - forexample public bus fleets or taxi companies. More information can be found in the corresponding background paper, section 4.1.14.
3.2.3.3

Methodological note 3: Using load factors to calculate emissions intensity

For relevant fossil fuel or hybrid vehicles or rolling stock needing to meet the thresholds, the project, product or suppor tinginfrastructure passes if:

Formulae:𝑣𝑒ℎ𝑖𝑐𝑙𝑒 𝑒𝑚𝑖𝑠𝑠𝑖𝑜𝑛𝑠 𝑝𝑒𝑟 𝑘𝑚 𝑤ℎ𝑒𝑛 𝑓𝑢𝑙𝑙𝑦 𝑙𝑜𝑎𝑑𝑒𝑑< 𝑢𝑛𝑖𝑣𝑒𝑟𝑠𝑎𝑙 𝑝𝑎𝑠𝑠𝑒𝑛𝑔𝑒𝑟 (𝑝𝑒𝑟 𝑝 − 𝑘𝑚) 𝑡ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑
𝐿𝑜𝑎𝑑 𝑓𝑎𝑐𝑡𝑜𝑟 × 𝑓𝑢𝑙𝑙 𝑐𝑎𝑝𝑎𝑐𝑖𝑡𝑦

Example:A municipality in the USA borrows money to replacxe a large proportion of its public bus fleet. Each new bus has 50 seats
and emits 437 gCO2/km when fully loaded. Buses are 30% full on average across all routes and times. A bond issued to
pay for the buses is eligible under the Criteria if:

437< 𝑢𝑛𝑖𝑣𝑒𝑟𝑠𝑎𝑙 𝑝𝑎𝑠𝑠𝑒𝑛𝑔𝑒𝑟 (𝑝𝑒𝑟 𝑝 − 𝑘𝑚) 𝑡ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑
0.3 × 50
29.1 𝑔𝐶𝑂2/𝑝 − 𝑘𝑚 < 𝑢𝑛𝑖𝑣𝑒𝑟𝑠𝑎𝑙 𝑝𝑎𝑠𝑠𝑒𝑛𝑔𝑒𝑟 (𝑝𝑒𝑟 𝑝 − 𝑘𝑚) 𝑡ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑(likely to be the case until 2026)

Example:A private locomotives company in China borrows money to replace a large proportion of its freight rolling stock. Eachnew train can transport up to 3000 tonnes of cargo and emits 30,000 gCO2/km when fully loaded. Trains are 60% full on
average across all routes and times. A bond issued to pay for the trains is eligible under the Criteria if:
3,000< 𝑢𝑛𝑖𝑣𝑒𝑟𝑠𝑎𝑙 𝑓𝑟𝑒𝑖𝑔ℎ𝑡 (𝑝𝑒𝑟 𝑡 − 𝑘𝑚) 𝑡ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑
0.6 × 3,000
16.6 𝑔𝐶𝑂2/𝑡 − 𝑘𝑚 < 𝑢𝑛𝑖𝑣𝑒𝑟𝑠𝑎𝑙 𝑓𝑟𝑒𝑖𝑔ℎ𝑡 (𝑝𝑒𝑟 𝑡 − 𝑘𝑚) 𝑡ℎ𝑟𝑒𝑠ℎ𝑜𝑙𝑑(likely to be the case until 2050)

Appendix

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3.2.3.4

Methodological note 4: load factors of passenger cars and commercial vehicles

For passenger cars and commercial vehicles, the load factor should always be taken as one passenger per vehicle in line with theWorldwide Harmonised Light Vehicle Test Procedure (WLTP), or other similar emissions testing procedures. The threshold metricfor cars and commercial vehicles can therefore be taken in practice also as gCO2/km.
As such there is no need to calculate average ridership, for example.
3.2.3.5

Additional notes

Thresholds currently do not differ between geographical regions and there are separate thresholds for passenger transport andfreight transport.
For freight transport, a threshold has not yet been set in the EU taxonomy. This will be 50% lower than average reference CO 2
emissions of HDVs as defined for the Heavy Duty CO2 Regulation, for which data will be available in the future. It should be noted
that, in a situation where a subsequent threshold for freight in the EU taxonomy is lower and thus more stringent than what iscurrently stipulated in the Transport Criteria, such a threshold would be adopted in these criteria in future versions to reflect thehighest green standards. Vice versa, these new thresholds would not be adopted into these criteria once known to avoid backsliding
on standards.

3.2.4 Exclusion of dedicated fossil fuel transport•

Railway lines and rolling stock
Infrastructure and rolling stock for railway lines that are built with the over-riding objective of transporting fossil fuels do
not qualify under the Criteria. That is if any of the following are true:a) The primary purpose of the line is clearly described as fossil fuel freight by authoritative government sources; or,in the absence of this:b) More than 25% of the freight in t-km transported by the line, on average, is comprised of fossil fuels*; oralternatively:c) More than 25% of the rolling stock is dedicated to the transport of fossil fuels* This can be demonstrated by issuers a number of ways:o•

For operators of railway lines and rolling stock, receipts may provide data that establish the tonnage of fossil fuelstransported as a percentage of total freight transported on the line.
o Lessors of rolling stock financing operations may demonstrate using their own internal data that the percentageof their clients that are engaged in fossil fuel activities or transport is below 25%.
o For banks issuing a bond in order to lease rolling stock, data may be provided which demonstrates that the
proportion of rolling stock dedicated to fossil fuel transport is below 25%.
Road vehicles
For road freight vehicle and component manufacturers, purchasers and operators (see Table 1), any proportion of a vehicle
or fleets cargo being made up of fossil fuels makes that vehicle or fleet ineligible and thus not certifiable.

3.2.5 Exclusion of biofuel vehicles
Road vehicles or rolling stock designated as using biofuels, even partially, do not qualify under these Criteria, even if meeting therelevant threshold for passenger or freight transport. The same exclusion rule holds for railway lines or networks that are being
financed on which biofuel rolling stock will run.
Note:

Appendix

Vehicles or rolling stock using petrol blends containing small percentages of biofuels
as seen in some countries are still eligible so long as they meet the rest of the criteria
relevant to them.

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3.2.6 Independent project appraisals for new interurban rail transport
For new interurban rail projects (including high-speed rail and dedicated freight lines):
A project only qualifies if an independent project appraisal demonstrates that the investment will reduce total transport related
greenhouse gas emissions (per p-km or per t-km) in the affected transport corridor by at least 25%.

Guidance on project appraisals:
In the development of a new interurban rail project, it may already be subject to carbon accounting or appraisal
procedures that could provide additional information. The project developer may thus have already chosen prior to preissuance an external party to develop the methodology or which owns a software tool that can provide the analysis. Thismay be a transportation planning software or similar.
In general, there are no specific requirements on the type of appraisal that is needed. A study commissioned by the
project developer to determine the level of emissions reductions would be accepted as an appropriate appraisal. The
two key factors that will be used to evaluate whether the study is suitably robust are:a) the developer has used reputable sources for references and emissions factors (for example government agencies,
UNFCCC, IEA, EEA) and;b) that the Verifier has checked and approved the study.
Assuming then that the study projects a minimum 25% emissions reduction in the transport corridor, the bond will suitably
meet this criterion.
A range of greenhouse gas emissions methodologies and calculators exist for railway lines including, but not limited to:
IFEU 2011, RFF-SNCF-ADEME 2011, NTNU 2011, UIC 2011, and AEA-CE Delft-TNO 2012. However, it is accepted the issuer
will likely have identified its own appraisal methodology to meet this requirement. As such, the Climate Bonds Initiative
do not specifically require or make distinctions between any type of appraisal or methodology and these are intended
simply as examples for context.
Note

Appendixthat for bonds refinancing existing interurban rail projects, the issuer need notmeeting this requirement.

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3.3 Requirements for passenger cars and commercial vehicles

Note:

Appendix

for passenger cars and commercial vehicles, the load factor used in meeting thethresholds (if relevant) should always be one passenger. As such, the metric can begCO2/km in practice.

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3.4 Requirements for public passenger transport by road

Note:for Bus Rapid Transit systems in developing countries (as defined by the OECD), the BRT
Criteria4 under the Climate Bonds Standard should be used. For such systems indeveloped countries (OECD defined), the Transport Criteria should continue to be used.

4 BRT Criteria and Guidelines (climatebonds.net)

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3.5 Requirements for freight transport by road

Appendix

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3.6 Requirements for passenger rail rolling stock

Note:

Appendix* This requirement does not need to be met for bonds refinancing existing interurban
rail lines, only for new ones.

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3.7 Requirements for railway networks and freight rail rolling stock

Note:

Appendix

This requirement does not need to be met for bonds refinancing existing interurban raillines, only for new ones.

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3.8 Miscellaneous vehicles for other sectors
Resulting criteria
The manufacture of miscellaneous vehicles used in other sectors that are zero direct emissions, e.g. off-road diggers, areautomatically eligible and therefore certifiable
Waste collection vehicles
In addition to their manufacture, the operation and leasing of waste collection vehicles that are zero direct emissions is also eligible
under these criteria

3.9 Requirements for infrastructure for low carbon transport
The following other infrastructure types are automatically eligible and therefore certifiable5:••••

Dedicated charging and alternative fuel infrastructure (when separable from fossil fuel filling stations and garages)
Retrofits for public transport infrastructure
Public walking and cycling infrastructure; cycling schemes
Construction and development, purchase, and/or operation of dedicated infrastructure for eligible rolling stock, railway
lines and networks, for example: train and bus stations, inspection depots for freight rail rolling stock, traction maintenancedepots/ motive power depots for rolling stock, backup electricity generators, signalling infrastructure including buildings

The following infrastructure types are eligible on a case-by-case basis6 and may include thefollowing:•

ICT that improves or is necessary for asset utilization, flow and modal shift, regardless oftransport mode (public transport information, car-sharing schemes, smart cards, roadcharging systems, etc.).

•

Intermodal freight facilities•

Investment in terminals to improve journey time•

Smart freight logistics

The following other infrastructure encourage maintained or increased ICE vehicle use patterns and are ineligible and therefore notcertifiable:•••

New roads, road bridges, road upgrades etc.
Parking facilities
Fossil fuel filling stations

5 These are intended merely as examples. The principle is that many types of vehicles exist which may not fall easily or intuitively into the other categories in thesecriteria yet form a significant part of an issuer’s transport assets and activities. This requirement is intended to allow for such instances. Other examples may exist
which, providing they are zero direct emissions, are eligible under these requirements.
6 The infrastructure types listed in box 2 are evaluated for certification on a case-by-case basis by the Climate Bonds Initiative. A 25% emissions reduction benchmark

is intended as last resort if it is uncertain how effective or necessary the infrastructure assets are to decarbonisation. If Climate Bonds is not satisfied with the general
information provided by the issuer to the verifier, then it will request demonstration of such a reduction, or vice versa.
Appendix

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4 Additional notes for Certification of Entities and SustainabilityLinked Debt
At this time, where Entity and SLD Certification are available only one level of Entity and SLD Certification is available, namely Level
1: “Aligned”. Achieving this requires:••

Entity Certification: At the time of certification, the Certified Entity’s activity meets the criteria listed in Table 1 and they
are committed to remaining in compliance with these criteria to 2050
SLD Certification: At the time of certification, the activities represented by the Performance Targets linked to the SLD meetthe criteria listed in Table 1 and the future Performance Targets to 2050 continue to meet those criteria going forward.

Climate Bonds is considering the criteria that would enable Level 2 certification (Level 2: “Transition”) in line with Entity and SLD
certification in other sectors.
See also the Climate Bonds Standard v4.0 for the cross sectoral requirements for Entity and SLD Certification relating to Transition
Plans and Disclosure for the Certified Entity and requirements in respect of the Parent Group (if any). These cross sectoral
requirements must be met in addition to the land transport-specific requirements described here.

NOTE:

Appendix

The Climate Bonds Standard allows for the certification of only part of a company or group ofcompanies (the ‘Certified Entity’), or SLD that relates to only part of a company or group ofcompanies. See the Climate Bonds Standard v4.0 for full details. This flexibility enables thecertification of, for example, a subsidiary dedicated to the manufacture of electric vehicles,
separate from the certification of other segments or subsidiaries of the company or group ofcompanies of which it forms a part.

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Appendix A: TWG and IWG members
Lead Advisors
Peter Anderson

European Investment Bank (EIB)

Andreas Barkman

European Environment Agency (EEA)

Heather Allen

Transport Research Laboratory

Benoit Lefevre

World Resources InstituteLewis Fulton

Davis Institute of Transportation
Studies, University of California

Arie Bleijenberg

Koios Strategy/ The Netherlands
Organisation for Applied Scientific
Research (TNO)

Michael Replogle

Institute for Transport andDevelopment Policy

Prof Dr Danang Parikesit

Indonesian Transport Society/
Universitas Gadjah Mada

Gary Hoffman

GM Hoffman Consulting

Carol Lee Rawn

Ceres

Elizabeth DeakinBerkeley Institute for Environment
Design, University of California

John Dulac

Organisation for Economic Cooperation and Development (OECD),
previously International Energy
Agency (IEA)

Karl Josef-Kuhn

Siemens

Pierpaolo Cazzola

International Transport Forum (ITF)/
OECD, previously International
Energy Agency (IEA)

Cornie Huizenga

Partnership on Sustainable, Low
Carbon Transport (SLoCaT)

TWG Members

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