TRANSPORTCRITERIA

Climate Bonds Standard
Why have Transport
Criteria?
Transport and Climate
Change:Greening transport is crucial to achieving
global decarbonisation targets andmeeting multiple sustainable development
goals (SDGs).
In 2014, the IPCC estimated that thetransport sector (including land, sea and airtransport) accounts for approximately 23%of all energy-related CO2 emissions globallyand 14% of total GHG emissions. Road
transportation for passengers and freight isresponsible for 73% of those CO2 emissions.
Moreover, transport energy use is projected
to continue increasing. New vehicle
technologies, electrified and other zero
emissions transport infrastructure, andoverall system improvements will be needed
to peak emissions, decarbonise the sector
and bring it in line with the Paris agreement.
Simultaneously, behaviour change and modal
shift can increase the share of more climate
friendly transport modes such as cycling orrail and decrease emissions further.

Eligible Use of Proceeds
Eligible use-of-proceeds relating to transportsystems might include capital and operating
expenditure relating to:
1. Passenger cars and commercial vehicles;
2. Public passenger transport by road;

Investment need:

3. Freight transport by road;

Some estimates suggest that as much as
USD 17.5 trillion is required per year between
2017 and 2060 to meet a below 2-degrees
Celsius warming scenario.

4. Passenger rail rolling stock;

Despite accounting for a large share of
the climate-aligned bond universe (59%),
total transport investment lies around USD
1.4 and 2.1 trillion per year, emphasising
an urgent need for more finance flows
directed towards addressing climate
impacts in the sector.

7. Infrastructure for low carbon transport.

5. Freight rail rolling stock;
6. Railway networks and lines; and:Eligible use-of-proceeds can also include key
supporting components and infrastructurethat enable mitigation in transport systems
or vehicles such as electric batteries, or zero
direct emissions vehicles that support otherindustries such as waste collection vehicles.

Some recent certified bonds in the sector

Programmatic and repeat issuers

Here are some exciting examples of how the criteria have beenused already in the past:

The Transport Criteria have been used repeatedly by some issuers
financing large-scale projects:

Rumo – July 2020: The Brazilian companyissued an 8-year bond to finance thepurchase of new locomotives and rollingstock for rail freight

New York Metropolitan Transport Authority:
they have certified fifteen bonds worth nearly
USD 10.4bn of issuance to finance capital
investments in MTA’s electrified rail assets andsupporting infrastructure

Porsche AG – August 2019: The motor vehicle
company issued EUR 1bn (USD 1.12bn) bond(tenor up to 7 years) to finance development
and production of its Taycan model, which is
Porsche AG’s first fully electric car
Russian Railways – May 2019: EUR 500mn(USD 585mn), 8-year bond to finance rollingstock which operate on many commuter andintercity routes

Transport Criteria Climate Bonds Standard November 2020

Société du Grand Paris: certified ten bonds
worth over USD 9bn of issuance to finance theconstruction of new lines and line extensions:almost 200 km of new metro lines in the Ile-deFrance region
JRRT: certified eight bonds worth nearly JPY
267bn of issuance (about USD 2.5bn) going tonetwork and infrastructure upgrades, including
the high-speed Shinkansen rail network

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Transport core eligibility
TRANSPORT MODESINFRASTRUCTURE

Is the mode of transport electric, hydrogen orother zero-direct emissions?

Yes

Is the project supporting infrastructure forzero-direct emissions transport modes (orprojects that would meet the criteria?

No
If it is not zero-direct emissions, do the operationalemissions fall below the following thresholds?
No
We are looking to see if the operational emissions
associated with the transport mode broadly
complies with either of these thresholds:

Yes

For example, manufacture of electric vehicle
components are considered green if they are
exclusively destined for zero-direct emissions
vehicles. All infrastructure upgrades, fueling andrefueling, rolling stock and vehicles soley for suchtransport are included as green.

No(a) <50g passenger-km (for passenger transport)(b)<25g tonne-km (for freight transport)

If the project is for public walking or cycling
infrastructure, this is automatically green.

If the mode of transport is freight rail AND/OR new interurbanrail, continue the flow. Any other mode is certified.

If freight rail, is less than 25% of the total freight
being transported comprising fossil fuels?

If the project is just a retrofit for public
transport infrastructure, this is considered
automatically green.

If the project is dedicated to the recharging
and refuelling of zero emissions vehicles, thisis considered automatically green.

NoYes

CertifiedIf new interurban rail, will the project result in atleast a 25% reduction in emissions in the travel
corridor?

No

Certain infrastructure types are eligible on acase-by-case basis, including smart freight logistics,
intermodal freight facilities and ICT that improves
system efficiency

An independent project appraisal must
demonstrate this reduction.
Yes
Certified

Not Certified

Automatically excluded projects include: Biofuels,
Fossil fuel transport by road, Road freight that is
not zero-direct emissions, Parking, New roads.

Tightening thresholds

Further information sources

Direct emissions thresholds will also tighten in linewith the need to decarbonise

Want to Certify, or just know more? Take a look at these documents:50

1. Transport Criteria Document: Summary of the Criteria forissuers and verifiers
2. Transport Criteria Background Document: TechnicalBackground and summary of Criteria development process
3. Climate Bonds Standard V3.0: CBI’s Certification process,Pre- and Post-issuance requirements and a suite of sector
eligibility and guidance documents

Passenger Activity (gCO2 per p-km)
Freight Activity (gCO2 per t-km)

250
2020

2025

2030

2050

For more information:
Go to www.climatebonds.net
Email chris.moore@climatebonds.net

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a financial organisation orinvestment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites. The Climate Bonds
Initiative is not endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any information inthis communication be relied upon in making any investment decision. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment an individual or organisation
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© Climate Bonds Initiative 2020

Transport Criteria Climate Bonds Standard November 2020

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