Cement Criteria
The Cement Eligibility Criteria of the
Climate Bonds Standard &Certification Scheme
Updated: April 2023

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

Revision

Date

Summary of Changes

Rev. 1.2

April 2023

Minor revisions to framing to reflect release of CBS v4.0

Rev. 1.1

December 2022

Amendment to bring Carbon Capture and Utilisation
within scope and add corrections and clarifications

Rev. 1.0

October 2022

Published as Final for CertificationRev. 0.2

July 2022

Issued as Draft for second Public ConsultationRev. 0.1

February 2022

Issued as Draft for Public Consultation

Climate Bonds Initiative - Cement 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 are given to Cyrille Dunant, the lead specialist, and Chris Moore, for coordinating thedevelopment of the Criteria through the Technical Working Group.
The Industry Working Group provided critical and useability focused consultation and feedback on the
Criteria, but this does not automatically reflect endorsement of the criteria by all members.

Cement Criteria- Climate Bonds Initiative

Page | 2

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Definitions
Applicant: The term or name for any potential bond issuer, or non-financial corporate entity that might seek certification under the Cement
Criteria.
Capital Expenditure (CAPEX): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants, buildings,
technology, or equipment.
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 that will deliver a
global low carbon and climate resilient economy. Climate Bonds seeks to develop mechanisms to better align the 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 the proceeds 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 standard (CBS v4.0) 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 under management.
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 governancearrangements 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 isprovided once the independent CBSB is satisfied the bond conforms with the CBS.
Clinker: an intermediate product in cement manufacture. It is made from the decarbonisation of limestone before it is melted (a term called
sintering) and then rapidly cooled.
Clinker factor: the percentage of clinker in cement.
Concrete: a material produced by mixing cement, water and gravel where the cement acts as a binder making up about 15% of the total.
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 theasset fence’ that could cause cascading failures or contribute to collateral system benefits.
General Corporate Purpose Bond: a bond the proceeds of which are not ringfenced for specific assets or activities, but which finance general OPEX
and CAPEX of a company without disclosing the exact uses. SLBs are examples of general corporate purpose bonds.
Green Bond: A green bond is a bond of which the proceeds are allocated to environmental projects or expenditures. The term generally refers tobonds that have been marketed as green. In theory, green bonds proceeds could be used for a wide variety of environmental projects or
expenditures, but in practice they have mostly been earmarked for climate change projects.
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 term or tenor.
Operating Expenditure (OPEX): Expense a business incurs through its normal business operations. Often abbreviated as OPEX, operating expenses
include rent, equipment, inventory costs, etc.
Ordinary Portland Cement (OPC): cement made from 95% of ground clinker and 5% gypsum.
Parent Company/Group: A company is considered a parent company of another entity (a subsidiary) if it exercises control over the subsidiary. The
terms “control” and “subsidiary” have the meaning assigned to them under International Financial Reporting Standard 10 (IFRS 10). A Parent
Group consists of the Parent Company and all the companies that the Parent Company exercises control over. Where the Applicant does
not belong to a group of companies, the term Parent Company applies to the Applicant.
Supplementary Cementitious Material (SCM): material that can act as a partial substitute for clinker in cement.
Sustainability-Linked Debt (SLD): Any debt instrument for which the financial and structural characteristics can vary depending on whether theissuer 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 as well as guidance on the trackingof 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.
Use-of-Proceed (UoP) Bond: a bond the proceeds of which are ringfenced for specific assets and activities. Green bonds, blue bonds, and transition
bonds are examples of UoP bonds.

Cement Criteria- Climate Bonds Initiative

Page | 3

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Table of Contents
Definitions

3

1

6

2

3

4

Introduction
1.1

The Climate Bonds Standard

6

1.2

Environmental scope

6

1.3

What can be certified?

6

1.4

Documents supporting these Criteria

7

1.5

Revisions to these Criteria

7

Cement activities in scope
2.1

The Cement Production supply chain in scope

8

2.2

Alignment with other Sector Criteria

10

2.3

Assets out of Scope

10

2.4

Entities out of Scope

11

Criteria for decarbonisation measures within cement production facilities

6

12

3.1

Mitigation Criteria

13

3.2

Adaptation & Resilience Criteria

14

Criteria for cement production facilities

17

4.1

Overview

17

4.2

Complying with the facility-level emissions intensity pathway

17

4.2.1

The pathway

18

4.2.2

Determining the appropriate threshold(s) for a specific facility

19

4.2.3

Calculating the corrected facility-level emissions according to cement class/grade

20

4.2.4

Methodological notes

22

4.3
5

8

Adaptation & Resilience Criteria

Cement Criteria for entities and Sustainability-Linked Debt (SLD)

24
28

5.1

Cement Criteria for Certified Entities

28

5.2

Cement Criteria for Sustainability-Linked Debt (SLD)

29

5.3

Methodological notes

30

5.3.1

Assessment at portfolio level

30

5.3.2

Scope of emissions

30

5.3.3

Entity-level emissions intensity thresholds for the Assessed Entity

30

5.3.4

Thresholds to be met every three years

31

Cross-cutting Criteria

31

6.1

Additional criteria when using biomass as a fuel

31

6.2

Additional criteria when using hydrogen as a fuel

32

6.3

Additional criteria when using Waste-Derived Fuels

32

6.4

Additional criteria for Carbon Capture & Storage (CCS)

33

6.5

Additional criteria for Carbon Capture, Utilisation and Storage (CCUS)

33

Appendix A: TWG and IWG members
Cement Criteria- Climate Bonds Initiative

34
Page | 4

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

List of Tables
Figure 1. The scope of activity when meeting the Cement Criteria
Figure 2: Overview of the Criteria for specific mitigation measures within cement production facilities
Figure 3: Overview of the Criteria for cement production facilities
Figure 4. Emissions pathway for all cement production facilities
Figure 5. Methodological note for the scope of emissions when meeting relevant thresholds.
Figure 6: The emissions pathway for all cement production companies (scope 1 & 2 emissions combined)

9
12
17
18
23
30

List of Tables
Table 1: Assets or projects partially or wholly covered by other sector criteria
Table 2: Assets and activities out of scope
Table 3: Entities out of scope
Table 4: Adaptation and Resilience Checklist for cement production mitigation measures
Table 5. Threshold values forming the emissions pathway for all cement production facilities
Table 6: Correction factors to determine the carbon intensity of the production
Table 7: Scope of Emissions
Table 8: Adaptation and Resilience Checklist for cement production facilities
Table 9: Two levels of Entity Certification
Table 10: SLB Tiered Certifications
Table 11: Threshold values forming the emissions pathway for all cement production companies
Table 12: Carbon intensity thresholds for the life cycle emissions of hydrogen used as a fuel

10
10
11
15
18
20
22
25
28
29
31
32

List of Appendices
Appendix A: TWG and IWG members

Cement Criteria- Climate Bonds Initiative

34

Page | 5

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

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 describes
the cross-sectoral criteria all certified instruments/ assets/ entities must meet, in addition to meeting the sector specific Criteria.

1.2 Environmental scope
Currently, certification requirements address:••

Climate change mitigation; andClimate adaptation and resilience.

1.3 What can be certified?
Subject to meeting the eligibility criteria in the following sectors, the following can be certified under these criteria:••••

Use-of-Proceed (UoP)1 bonds financing decarbonisation measures (e.g., retrofits) - see Section 3.
Use-of-Proceed (UoP) bonds financing cement production facilities (i.e., assets and activities) - see Section 4.
Assets not linked to any specific financing instrument (cement production facilities) - see Section 4.
Entities (cement production companies) and Sustainability Linked Debt (SLD) instruments issued by those entities - see
Section 5.

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 cement-specific requirements describedin this document.
To demonstrate compliance with the following Criteria, in accordance with the CBS, it is the applicant’s responsibility to provide theinformation to prove compliance with each component of these Criteria. Verifiers must include this information in the scope ofverification.

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

securities.
Cement Criteria- Climate Bonds Initiative

Page | 6

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Where the bond portfolio includes several separately identifiable projects, expenditures, or groups of assets, these criteria must be
met for each separately identified project or asset grouping. Applicants should determine these project boundaries, which may bebased on geographical and/or supply chain linkages.

1.4 Documents supporting these Criteria
Information to support applicants and verifiers is available at Cement | Climate Bonds Initiative as follows:
•
•
•
•
•

Background Paper that details why the criteria were chosen
Cement Criteria FAQs (FAQ’s)
Public-Consultation-Issues & Response Report
The Climate Bonds Standard v4.0: contains the requirements of the overarching CBS
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 on a regular basis, at which point the TWG will take stock of the deals that are printed in the earlystages and any developments in improved methodologies and data that can increase the climate integrity of future deals. As aresult, the Criteria are likely to be refined over time, as more information becomes available. Certification will not be withdrawn
retroactively from bonds certified under earlier versions of the Criteria.

Cement Criteria- Climate Bonds Initiative

Page | 7

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

2 Cement activities in scope
2.1 The Cement Production supply chain in scope
These Criteria cover assets and activities involved in the production of cement, and companies that operate such assets or activities.
The scope boundaries begin at the quarrying of limestone (only if integrated on the same geographical location(s) as cement
production facilities and operations2) and end at the final blended cement product. As such, potential assets and activities thatmight be certified (subject to meeting the eligibility criteria) include whole cement facilities, but also kilns, burners, grinding
equipment, blending equipment, calciners, precalciners, Supplementary Cementitious Materials (SCM), digitisation measures, heatrecovery systems, and others. Cement production facilities may be integrated from quarries to blended cement, or they may be
responsible for only one stage of production, for example, clinker production, grinding, or blending.
NOTE: Some entities whose sole business activity is one of the above production stages (suchas clinker production) may not be eligible for certification. See section 2.4 for details.

Figure 1 below details the cement production activities within scope and which can thus be certified, subject to meeting the criteria.
NOTE: The scope of activity is not the same as the scope of emissions. The scope of activity
describes what activities can potentially be certified under these criteria. The scope ofemissions (section 4.2.4.2) describes what emissions are accounted for when meetingthe pathway.

2 If the quarrying is not carried out on the same geographical site as cement production, the scope boundary begins when cement production begins (i.e., raw mill

grinding of materials).
Cement Criteria- Climate Bonds Initiative

Page | 8

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Fuel production(e.g., biogas)

Fuel extraction(e.g., coal mining)

Quarrying, crushingand transport oflimestone*

Boundary ofactivities thatcan be certified

Raw Mill Grinding

Precalciner

Preheater and Kiln

Cooling

SCM Production**

Grinding
Upstream
Raw material
preparation

Blending

CementProduction
Downstream

Concrete Mixing
and Construction

Logistics***

Within scope provided it is located on the same site as
cement production (see Section 2.1).
Entities which produce solely SCM cannot be certified at
this time.

Figure 1. The scope of activity when meeting the Cement Criteria

Cement Criteria- Climate Bonds Initiative

Page | 9

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

2.2 Alignment with other Sector Criteria
In respect of UoP bond certifications, where the proceeds will be allocated to multiple sectors, proof of compliance with multiple
sector criteria may be required across the portfolio. For example, if the UoP bond is financing both cement activities and steel
activities, then the applicant would have to prove compliance with the Cement Criteria in respect of the former and the Steel Criteria
in respect of the latter.
In respect of SLD and Entity Certifications, where the SLD or entity Performance Targets span multiple activities within the entity,
all those activities will need to be assessed against the appropriate sector criteria and an overall ‘pass threshold’ reached. See the
Climate Bonds Standard v4.0 Parts D and C respectively for more information on this.
In some cases, it may not be immediately clear whether activities or projects might fall under these criteria or other sector criteria.
The most common examples, and appropriate sector criteria to be used, are clarified in Table 1 below.
Table 1: Assets or projects partially or wholly covered by other sector criteria
Potential use-of-proceeds

Sector Criteria

Production of Hydrogen.

Hydrogen Production

Buildings, commercial and/or residential, that are not solely dedicated to a
cement production facility. For example, office buildings for staff.

Buildings

Vehicles that cannot be demonstrated to exclusively support compliant
cement activities.

Transport

Co-processing and sorting of municipal solid waste or waste derived fuels.

Waste Management

Production of bioenergy.

Bioenergy Criteria

Energy generation including Solar, Wind, Marine Renewable energy,
Hydropower and Bioenergy.

Relevant corresponding sector criteria

2.3 Assets out of Scope
NOTE: Being outside of the scope of criteria does not indicate that the TWG view these assets
and activities as inconsistent with meeting Paris Agreement goals or with a Paris-aligned
economy. Rather, due to time and resource constraints, these Criteria do not take astance on these issues. Future versions of the Cement Criteria may address these andset robust criteria alongside

Table 2: Assets and activities out of scope
Excluded Assets andActivities

Comment

Production of fly ash andblast furnace slag

Certified bonds cannot finance the production of these through coal power or steel
production. However, the processing of such materials extant from a power plant thatno longer functions can be certified.

Concrete

The production of concrete itself and associated activities (mix design, mixing itself,
transportation to site, quality control, etc.) are out of scope.

Quarrying

Quarrying in and of itself (i.e., that is separate from a cement plant or is a pureplay
quarry company) is not within scope.

Cement Criteria- Climate Bonds Initiative

P a g e | 10

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

2.4 Entities out of Scope
NOTE: Being outside of the scope of criteria does not indicate that the TWG view these activities
or entities as inconsistent with meeting Paris Agreement goals or with a Paris-aligned
economy. Rather, due to time and resource constraints, these Criteria do not take astance on these issues. Future versions of the Cement Criteria may address these andset robust criteria alongside

Table 3: Entities out of scope
Excluded Entities

Comment

Pureplay concrete
producers

Companies whose sole activity is the production of concrete itself and associatedactivities (mix design, mixing itself, transportation to site, quality control, etc.).

Pureplay quarrying
companies

Companies whose sole activity is quarrying (i.e., separate from a cement production
company).

Pureplay clinker
production companies

Companies that solely produce clinker which is then sold downstream for further
processing into cement.
Note: companies that produce clinker and cement are within scope, as a companies thatpurchase clinker.

Cement Criteria- Climate Bonds Initiative

P a g e | 11

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

3 Criteria for decarbonisation measures within cement
production facilities
These criteria cover capital investments (decarbonisation measures) within facilities in operation pre-2022. This differs from an
investment that would finance the cost of a whole facility in that it is focused on measures or specific areas of improvement withina production facility.
All measures must meet the following:••

Mitigation criteria (Section 3.1).
Adaptation and resilience criteria (Section 3.2).

1. Are the proceeds solely financing one or more of the measures listed in Box 1?

Yes

No
No

2. Are the proceeds solely financing one or more of the measures listed in Box 2, andsubsequently meet the corresponding criteria?
Yes
3. Has the issuer fulfilled the relevant requirements as part of the Adaptation &Resilience Checklist?
See Section 3.2 for the full Adaptation & Resilience Checklist for measuresNo

Not certifiable

Yes

Certifiable

Figure 2: Overview of the Criteria for specific mitigation measures within cement production facilities

Cement Criteria- Climate Bonds Initiative

P a g e | 12

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

3.1 Mitigation Criteria
These measures or capital investments are split into two groups, illustrated in Box 1 and Box 2. Box 1 contains measures that areautomatically eligible from a mitigation standpoint. Box 2 includes measures that are eligible conditional on meeting specificeligibility criteria.
Box 1: Measures which automatically meet the mitigation component•

Installation, upgrade and operation of precalciners.

•

Installation, upgrade, and operation of heat recovery systems.

•

Installation, upgrade, and operation of digitized control equipment or infrastructure. This may include:oSensors and measurement tools (including software to allow real-time and close control of processes toimprove efficiency).

oCommunication and control (including advanced software and control rooms, and automation of plant
processes).

•

Installation, upgrade, and operation of testing equipment. For example:oAutomated XRD systems.

•

Electrification of heat (for example, electrified kiln processes).

•

Installation, upgrade and operation of equipment dedicated to calcined clay use in cement production as distinct
from clinker.

•

Installation, upgrade and operation of equipment dedicated to processing legacy or historic fly ash and blast furnaceslag, extant from power plants that no longer exist.
Note:

These assets and activities must still meet the requirements for Adaptation &Resilience set out in Section 3.2.

Box 2: Measures which are eligible subject to meeting measure-specific criteria•

Installation, upgrade, retrofit and operation of measures which achieve emissions savings equivalent to the emissions
decrease for facilities between the start year of the bond and the end year (see worked example below).

•

Installation, upgrade, and operation of carbon capture and storage equipment where the average capture rate acrossall point sources is greater than 70% of total emissions, and where the criteria for transport and storage components
are met by the applicant (see Section 6.4 for details).

•

Installation, upgrade and operation of carbon capture, storage and utilisation processes that utilise CO2 either
through curing carbonation, mineralisation of CO2 in concrete waste, or production of recyclable products (seeSection 6.5.

•

Infrastructure, revamps or modifications of equipment needed for the production of cement using hydrogen as a fuelwhere the criteria for hydrogen are met by the applicant (see Section 6.2 for details).

Note:

These assets and activities must still meet the requirements for Adaptation & Resilience set out in
Section 3.2.

Cement Criteria- Climate Bonds Initiative

P a g e | 13

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Worked example for calculating the necessary emissions reduction for an eligible measure/ bundle of measures
A group of cement plants will all have retrofits carried out to equip them with state-of-the-art burners and calciners. The
bond term is 5 years and starts in 2025.
Per the emissions reduction pathway for facilities in section 0, the emissions intensity threshold for plants in 2025 is 0.416,
and the threshold in 2030 is 0.363. This represents a percentage decrease of 13%. Therefore, to be eligible, the measureor bundle of measures must achieve a reduction in emissions of 13% at plant level in order to be eligible. If achieved, theapplicant can include the whole cost of the measures in the certification.
The applicant certifying measures using this method shall:•

Have a contract or agreement with a certified energy auditor demonstrating the assets emissions intensity shall be
improved over the term of the bond such that its end performance is equivalent to the upgrade performancerequirements determined by the term of the bond•

Report pre-retrofit emission intensity•

Report post-retrofit emissions intensity•

Report percent improvement achieved

Emissions intensity shall be calculated according to the scope of emissions per section 4.2.4.2.

3.2 Adaptation & Resilience Criteria
This section describes the Adaptation & Resilience (A&R) Component of the eligibility Criteria for decarbonisation measures. To
demonstrate compliance, all measures must satisfy the requirements of the checklist detailed in Table 4.
The checklist is a tool to verify that the applicant has implemented sufficient processes and plans in the design, planning anddecommissioning phases of a measure to ensure that the operation and construction of the asset minimises environmental harmand the asset is appropriately adaptive and resilient to climate change and supports the adaptation and resilience of otherstakeholders in the surrounding system, if applicable.
All elements of the checklist must be addressed, and appropriate evidence provided that these requirements are being met or are
not applicable in respect of the specific measure(s) linked to the bond. It is expected that the applicant’s evidence will encompass
a range of assessment and impact reports and associated data, including but not limited to those reports required to meet national
and local licensing and approval processes. This might include Development Consent Orders, planning regulations adhered to,Environmental Impact Assessments, Vulnerability Assessments and associated Adaptation Plans.
It is the applicant’s responsibility to provide the relevant information to the verifier. Verifiers must include this information in thescope of verification.
For each question in the scorecard:•••A ‘yes’ indicates sufficient proof given.
A ‘no’ indicates insufficient proof.
In case of a ’n/a,’ please justify why the question is not applicable.

Cement Criteria- Climate Bonds Initiative

P a g e | 14

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Table 4: Adaptation and Resilience Checklist for cement production mitigation measures
No.

Adaptation and Resilience checklist for Cement Production Mitigation Measures

Proof Given

Overall
Assessment

For verifier to complete

Area 1: Clear boundaries and critical interdependencies between the measure and the system it operates within are
identified.
1.1.

Boundaries of the measures are defined using:
1.
2.
3.

1.2.

a listing of all equipment associated with the use of the bond proceeds,
a map of their location or illustration of their place/role within the overall facility,
andidentification of the expected operational life of the equipment.

Critical interdependencies between the measure(s) and the system within which it/they
operate(s) are identified. Identification of these interdependencies should consider the
potential for adverse impacts arising from, but not limited to:
1. relationships of the measure(s) to nearby flood zones;
2. relationships of the measure(s) to surrounding water bodies and water courses;
3. reduction in pollinating insects and birds;
4. reduction in biodiversity or High Conservation Value3 habitat;
5. dust and other practices that affect air quality;
6. appropriation of land or economic assets from nearby vulnerable groups4.

Area 2: An assessment has been undertaken to identify the key physical climate hazards to which the measure will be
exposed and vulnerable to over its operating life.
2.1

Key physical climate risks and indicators of these risks are identified in line with thefollowing guidelines:•

Risks are identified based on (a) a range of climate hazards, and (b) information
about risks in the current local context, including reference to any previously
identified relevant hazard zones, e.g., flood zones.

In order to be confident that measures are robust and flexible in the face of climatechange uncertainties, it is essential that the climate risks being assessed and addressedcover those that are of greatest relevance to cement production equipment. The
physical characteristics of climate change that must be considered in the risk
assessment include:
•
•

•
•
•

Temperature riseo High temperatures can impact the operation and efficiency of certain
types of equipment.
Increasing intense precipitation eventso Heavy rainfall can result in flash pluvial flooding, which could significantly
impact industrial assets5.
o Drought may alter or reduce availability of water with temperature
increase.
Changes in cloud cover, wind speed or increasing temperature extremeso Poses risks to the availability of reliable energy, both electrical or thermal.
Sea-level riseso Potential for flooding of coastal infrastructure and assets at risk fromstorm surge events.
Increased soil erosion

3 High Conservation Value (HCV) habitat criteria in accordance with www.hcvnetwork.org.
4 According to IFC Performance Standards
5 Flood risk and resilience will likely have interdependencies with local and national agencies, for example related to local f lood defences, coastal flood risk

management, shoreline management plans etc.
Cement Criteria- Climate Bonds Initiative

P a g e | 15

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

No.

Adaptation and Resilience checklist for Cement Production Mitigation Measures

Proof Given

Overall
Assessment

For verifier to completeooRisks to the availability of raw materials.
Risk to transport routes for supply chains.

Guidance for carrying out Risk Assessments:••••

Users should apply climate scenarios based on representative concentration
pathway (RCP) 4.5 and 8.5 or similar/ equivalent to ensure consideration for worst
case scenario.
Risk assessments should use both top-down methods and bottom-up methods thatlook at inherent system vulnerabilities in local context.
A broad range of models can be used to generate climate scenarios.
For risk assessment, the TCFD The Use of Scenario Analysis in Disclosure of ClimateRelated Risks and Opportunities is recommended.

Area 3: The measure is suitable to climate change conditions over its operational life
3.1

The equipment must be tolerant to the range of climate hazards identified in item 2 ofthis checklist and not lock-in conditions that could result in maladaptation.

3.2

Risk reduction actions/strategies must be tolerant to a range of climate hazards andnot lock-in conditions that could result in maladaptation.

Area 4: The measure does no harm to the climate resilience of the defined system it operates within, as indicated by theboundaries of and critical interdependencies with that system as identified in item 1 in this checklist.
4.1

The equipment itself does not pose significant risk of harm to the system it is locatedwithin or others’ natural, social, or financial assets according to the principle of best
available evidence during the investment period, taking into account the boundaries
and critical interdependencies as defined in item 1 in this checklist.
Harm is defined as an adverse effect on any of the following items:
1. Adverse effects on local water bodies and water courses;
2. Air pollution from dust and other pollutants;
3. Relationships of the measure to nearby flood zones;
4. Reduction in pollinating insects and birds;
5. Reduction in biodiversity or High Conservation Value6 habitat;
6. Appropriation of land or economic assets from nearby vulnerable groups7.

6 High Conservation Value (HCV) habitat criteria in accordance with HCV Network
7 According to IFC Performance Standards

Cement Criteria- Climate Bonds Initiative

P a g e | 16

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4 Criteria for cement production facilities
4.1 Overview

1.
No

Does the facility’s correction factor-adjusted emissions intensity comply
with the facility-level pathway threshold at the time of certification?
See Section 4.2 for full details.

Yes
If the plant uses virgin biomass, hydrogen, or waste-derived fuels as a fuel feedstock in its
kiln:
No

2.

Does the production of the biomass used meet the criteria in Section 6.1?

3.

Does the production of hydrogen meet the criteria in Section 6.2?

4.

Does the waste-derived fuel meet the criteria in Section 6.3?

Yes

No

If the plant uses Carbon Capture and Storage (CCS) equipment on siteYes

5. Does the CCS meet the criteria in Section 6.4?

6. Does the facility meet the requirements described in the Adaptation & Resilience
Checklist?
See Section 4.3 for the full Adaptation & Resilience Checklist for facilities

No
Not certifiable

Yes
Certifiable

Figure 3: Overview of the Criteria for cement production facilities

4.2 Complying with the facility-level emissions intensity pathway
The facility is eligible if its emissions intensity, adjusted using the relevant correction factor (section 4.2.3), is lower than the relevant
facility-level emissions intensity threshold (section 0).

Cement Criteria- Climate Bonds Initiative

P a g e | 17

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4.2.1 The pathway
The pathway GHG intensity metric is in terms of t CO2/ t cementitious product or t CO 2/ t cement (equivalent) 8.
“Cementitious product” means clinker, cement and cement substitutes produced by the reporting company. The full definition fort CO2/ t cementitious product shall be according to the Cement CO 2 Protocol v3.0 (2011) “Specific CO2 per ton of cementitious
product”.
The facility-level emissions intensity thresholds over time are given in Figure 4 and Table 5. The applicant must first calculate thefacility’s correction factor-adjusted emissions intensity to account for the cement grade being produced as per section 4.2.3. This
number can then be compared to the relevant threshold in this section.

Carbon intensity (tonnes CO2 per
tonne of cementitious product)

The use of these corrected pathways depends partly on the term of certification and partly on applicant preference. Guidance on
all of these aspects is provided below.

0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
2020

2025

2030

2035

2040

2045

2050

Year
Figure 4. Emissions pathway for all cement production facilities
Table 5. Threshold values forming the emissions pathway for all cement production facilities
Carbon intensity

Carbon intensity

Carbon intensity

Carbon intensity

Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)

2020

0.469

2028

0.384

2036

0.253

2044

0.107

2021

0.458

2029

0.374

2037

0.234

2045

0.089

2022

0.448

2030

0.363

2038

0.216

2046

0.071

2023

0.437

2031

0.345

2039

0.197

2047

0.054

2024

0.427

2032

0.326

2040

0.179

2048

0.036

2025

0.416

2033

0.308

2041

0.161

2049

0.018

2026

0.406

2034

0.289

2042

0.143

2050

0.000

2027

0.395

2035

0.271

2043

0.125

Note:

Pathway based on a starting point (in 2020) of the EU Taxonomy thresholds
for cement. Trajectory of the Science-Based Targets Initiative sectoral
decarbonisation pathway applied to this starting point to reach net zero by
2050. Full methodology in the Background Paper.

8 Where no non-cement materials are being processed and so cement and cementitious product are effectively the same.

Cement Criteria- Climate Bonds Initiative

P a g e | 18

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4.2.2 Determining the appropriate threshold(s) for a specific facility
In terms of meeting the facility-level emissions intensity thresholds going forward, applicants issuing a UoP bond for a cement
facility may either:a)Calculate the average facility-level emissions intensity threshold over the term of certification, and demonstrate that thefacility meets that average threshold at the time of certification; orb) Meet the threshold at the time of certification and commit to three yearly assessments by an approved verifier throughout
the period of certification to verify that at each three yearly check-in, the facility meets the new, lower emissions intensity
threshold in place at that time. If on any three yearly verification the facility is not demonstrated to meet the emissions
intensity threshold then in place, certification will be removed. Correction factor should be applied as per section 4.2.3.
Applicants seeking certification of an asset not linked to any financial instrument must:a)

Meet the facility-level pathway threshold at the time of certification.9

NOTE:

Applicants determining the appropriate threshold(s) through route (a) above need not
apply a correction factor based on the cement grade (section 4.2.3).

Example (a) - compliant•

A 10-year bond starting in 2025 may demonstrate that the plant’s emissions intensity at the point of issuance meetsthe average emissions intensity of the plant pathway between 2025 and 2035:
2025 threshold = 0.416
2035 threshold = 0.271(0.416 + 0.271)/ 2 = 0.344t CO2/t cement•

The applicant does not need to apply a correction factor to their emissions intensity for this route.

•

The facility’s emissions intensity in 2025 is already 0.320t CO2/t cement.

•This is lower than the necessary averaged threshold and the facility meets the criterion. No further verification isrequired for meeting emissions intensity thresholds.

Example (b)•A 10-year bond starting in 2025 would have to show compliance in annual reporting for the thresholds of 2025, 2028,
2031 and 2034.

•

For each of those years, the applicant must recalculate the facility’s corrected emissions intensity based on the cement
grade produced per section 4.2.3.

•

Verification must demonstrate every 3 years that these thresholds are met.

9 As this is a point-in-time certification, there is no need to continuously meet the pathway thereafter.

Cement Criteria- Climate Bonds Initiative

P a g e | 19

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4.2.3 Calculating the corrected facility-level emissions according to cement class/grade
The facility shall test their product following EN 197-110 and report the value. Based on the cement grade produced (or the massweighted average strength grade produced where multiple grades are produced by a plant), the corresponding correction factor
for that class should be applied to the facility’s emissions intensity for that year.
•••

If EN 197-1 is not used, applicants should use a corresponding nominal strength according to a locally used standard (seeWorked Example 3 below).
Where multiple classes/grades are produced by a plant or company, the mass-weighted average strength grade produced
should be used to calculate the appropriate correction factor (see Worked Example 2 below).
Where certification covers a new facility or group of facilities that do not yet know the mix of different cement products
to be produced (for example, because clients have not yet specified), the correction factor for year 1 of certification canbe set as 1. The applicant must then apply the appropriate correction factor no more than three years after production
begins as part of the annual reporting for that year, in line with section 4.2.2. However, it is possible to do this sooner
using one- or two-years’ production data.

NOTE:

Application of correction factors does not apply to applicants determining thresholds
through route (a) per section 4.2.2 above.

The factors are:Table 6: Correction factors to determine the carbon intensity of the production
Expected emissions

Cement class

Correction factor(t CO2eq/ t cementitious product)

32.5

0.550

1.18

42.5

0.649

1.00

52.5

0.748

0.87

Worked example 1 - one single cement grade produced on site•

A single facility produces cement of strength class 32.5 (correction factor of 1.18 per Table 5).

•

The facility’s emissions intensity is 0.416 t CO 2/ t cementitious product.

•

The corrected emissions intensity is 0.491 t CO2/t cementitious product (0.416 x 1.18). This is the number comparedto the pathway thresholds.

10 https://datis-inc.com/blog/what-is-en-197-1-standard/

Cement Criteria- Climate Bonds Initiative

P a g e | 20

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Worked example 2 - multiple cement grades produced on site•

A single facility produces several cement products of varying strength grades. In an example year, it produces 4000
tonnes of 42.5 cement, and 6000 tonnes of 52.5 cement.

•

The weighted average grade is:((42.5 x 4000) + (52.5 x 6000))/ (4000 + 6000) = 48.5

48.5 is of course not an industry standard grade but is simply for the purposes of working out the expected emissions
using the above linear relationship between cement class and emissions.
•This almost linear relationship above assumes that for every increase in megapascals by 1, emissions increase by
0.0099 t CO2/ t cementitious product.

•

The difference in emissions between 42.5 and 48.5 is:0.0099 x 6 = 0.0594•

The expected emissions of a 48.5 cement is:0.649 + 0.0594 = 0.708t CO2/ t cementitious product.

•

The conversion factor is thus 0.649/ 0.708 = 0.92•

The facility’s emissions intensity is 0.416t CO2/ t cementitious product.

•

The corrected emissions intensity is therefore 0.383t CO2/t cement (0.416 * 0.92)

Worked example 3 - non-European Cement Standard•

A single facility produces cement under the Australian Cement Standard of strength class N40.

•

This means it has a compressive strength (in mpa) of 40mpa after 28 days of mixing.

•

The same process as Worked example 3 then applies.

•

The difference in emissions between a cement of 40mpa and 42.5mpa is:(40-42.5) x 0.0099 = -0.02475•

The expected emissions of an N40 cement is:0.649 - 0.02475 = 0.624t CO2/ t cementitious product•The conversion factor is thus 0.649/ 0.624 = 1.04•

The facility’s emissions intensity is 0.416t CO2/ t cementitious product.

•

The corrected emissions intensity is therefore 0.432t CO2/t cement (0.416 * 1.04)

Cement Criteria- Climate Bonds Initiative

P a g e | 21

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4.2.4 Methodological notes
4.2.4.1

Assessment at asset level, not portfolio level

Where a number of production facilities are being assessed, this should be done facility by facility, i.e., not averaged across a
portfolio of assets.

4.2.4.2

The scope of emissions used in meeting the pathway

Table 7: Scope of Emissions
Scope Emissions

Cement context

emissions from cement
production

•
•
•
•

Burning fossil fuels to heat kilns (thermal emissions)
Calcination emissions (process emissions)
Emissions from alternative fuels and raw materials (AFR)
On-site power generation

Indirect (Scope 2)•

Purchase of electricity, steam, heat, or cooling

Direct (Scope 1)

purchased energy emissions

Off-site (Scope 3)
indirect impacts in value chain
not owned or controlled by thereporting organisation(upstream)

Because the carbon intensity of the final cement product is the metric, facilities responsible
for one specific production stage (for example, grinding facilities) must partially incorporate
Scope 3 emissions. However, this is only Scope 3 emissions up to the point of the finishedcement, not downstream emissions associated with transporting or using the clinker/cement
product.
For example, a grinding or blending operation must incorporate upstream scope emissions
from clinker production.

Figure 5 below details the cement production activities within scope, at the same time detailing the emissions that must be
accounted for when meeting thresholds.

Cement Criteria- Climate Bonds Initiative

P a g e | 22

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Natural Gas andBiogas* production

Limestone quarrying

Coal mining

Crushing

Transport

Emissionsboundary formeeting
thresholds

Raw Mill Grinding

Precalciner**Preheater andKiln**

Purchased
electricity, steam,heat or cooling

Cooling

SCM Production
Grinding

Upstream
Raw material
preparation

Blending

CementProduction

Downstream

Concrete Mixing
and Construction

Logistics***

Biogas production must nonetheless meet the overarchingrequirements of the Bioenergy Criteria (see Section 6.1).
All emissions from fuel burning including waste-derived fuelsmust be accounted.

Figure 5. Methodological note for the scope of emissions when meeting relevant thresholds.

Cement Criteria- Climate Bonds Initiative

P a g e | 23

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

4.2.4.3

Emissions from alternative fuels and raw materials (AFR), including waste derived fuels

Emissions from the burning of waste-derived fuels must be included in meeting thresholds and cannot be automatically viewed aszero emissions (‘net emissions’). The following guidance/standards may be referred to:••

Cement CO2 Protocol v3.0 (2011)
ISO 21644 - Measuring the Biomass Content of Solid Recovered Fuels (SRF) (ISO 2021)

Additional criteria for waste-derived fuels are found in Section 6.3.

4.3 Adaptation & Resilience Criteria
This section describes the Adaptation & Resilience (A&R) Component of the eligibility Criteria for cement production facilities. To
demonstrate compliance, all facilities must satisfy the requirements of the checklists detailed below in Table 8.
The checklists are tools to verify that the applicant has implemented sufficient processes and plans in the design, planning anddecommissioning phases of a facility/facilities to ensure that the operation and construction of the facility minimises environmental
harm and the facility is appropriately adaptive and resilient to climate change and supports the adaptation and resilience of otherstakeholders in the surrounding system, if applicable.
All elements of the checklist must be addressed, and appropriate evidence provided that these requirements are being met or are
not applicable in respect of the specific facility linked to certification. It is expected that the applicant’s evidence will encompass a
range of assessment and impact reports and associated data, including but not limited to those reports required to meet national
and local licensing and approval processes. This might include Development Consent Orders, planning regulations adhered to,Environmental Impact Assessments, Vulnerability Assessments and associated Adaptation Plans.
It is the applicant’s responsibility to provide the relevant information to the verifier. Verifiers must include this information in thescope of verification.
For each question in the scorecard:•••A ‘yes’ indicates sufficient proof given.
A ‘no’ indicates insufficient proof.
In case of a ’n/a,’ please justify why the question is not applicable.

Cement Criteria- Climate Bonds Initiative

P a g e | 24

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Table 8: Adaptation and Resilience Checklist for cement production facilities
Adaptation and Resilience checklist for Cement Production Facilities
No.

(Note, if the facility shares the same site with a quarry, the applicant must consider both the production
plant and the quarry in the scope of the assessment)

Proof Given

Overall
Assessment

For verifier to complete

Area 1: Clear boundaries and critical interdependencies between the facility/facilities and the system it operates within are
identified.
1.1.

Boundaries of the infrastructure are defined using:
1.
2.
3.

1.2.

a listing of all facilities associated with the use of the bond proceeds,
a map of their location, andidentification of the expected operational life of the facilities.

Critical interdependencies between the facility/facilities and the system within whichit/they operate(s) are identified. Identification of these interdependencies should
consider the potential for adverse impacts arising from, but not limited to:
1.
2.
3.
4.
5.
6.

relationships of the facilities to nearby flood zones;
relationships of the facilities to surrounding water bodies and water courses;
reduction in pollinating insects and birds;
reduction in biodiversity or High Conservation Value11 habitat;
dust and other practices that affect air quality;
appropriation of land or economic assets from nearby vulnerable groups12.

Area 2: Clear boundaries and critical interdependencies between the infrastructure and the system it operates within are
identified.
2.1

Key physical climate risks and indicators of these risks are identified in line with thefollowing guidelines:•

Risks are identified based on (a) a range of climate hazards, and (b) information
about risks in the current local context, including reference to any previously
identified relevant hazard zones, e.g., flood zones.
In order to be confident that cement production facilities are robust and flexible in theface of climate change uncertainties, it is essential that the climate risks being assessed
and addressed cover those that are of greatest relevance to industrial facilities andinfrastructure such as cement production plants and other infrastructure. The physicalcharacteristics of climate change that must be considered in the risk assessment
include:
•
•

•
•
•

Temperature riseo High temperatures can impact the operation and efficiency of certain
types of equipment.
Increasing intense precipitation eventso Heavy rainfall can result in flash pluvial flooding, which could significantly
impact industrial assets13.
o Drought may alter or reduce availability of water with temperature
increase.
Changes in cloud cover, wind speed or increasing temperature extremeso Poses risks to the availability of reliable energy, both electrical or thermal.
Sea-level riseso Potential for flooding of coastal infrastructure and assets at risk fromstorm surge events.
Increased soil erosion
o Risks to the availability of raw materials.

11 High Conservation Value (HCV) habitat criteria in accordance with www.hcvnetwork.org.
12 According to IFC Performance Standards
13 Flood risk and resilience will likely have interdependencies with local and national agencies, for example related to local f lood defences, coastal flood risk

management, shoreline management plans etc.
Cement Criteria- Climate Bonds Initiative

P a g e | 25

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Adaptation and Resilience checklist for Cement Production Facilities
No.

(Note, if the facility shares the same site with a quarry, the applicant must consider both the production
plant and the quarry in the scope of the assessment)oProof Given

Overall
Assessment

For verifier to complete

Risk to transport routes for supply chains.

Guidance for carrying out Risk Assessments:••••

Users should apply climate scenarios based on representative concentration
pathway (RCP) 4.5 and 8.5 or similar/ equivalent to ensure consideration for worst
case scenario.
Risk assessments should use both top-down methods and bottom-up methods thatlook at inherent system vulnerabilities in local context.
A broad range of models can be used to generate climate scenarios
For risk assessment, the TCFD The Use of Scenario Analysis in Disclosure of ClimateRelated Risks and Opportunities is recommended.

Area 3: The measures that have or will be taken to address those risks mitigate them to a level such that the infrastructure issuitable to climate change conditions over its operational life.
3.1

The following are examples of risk management activities that applicants might
consider, or that might be adopted as part of regulations (e.g. codes and standards).
This list is not exhaustive, and applicants should fully assess the mitigation measuresthat are relevant to the climate risks and impacts identified in the risk assessment.
Temperature••

Design standards that maintain equipment rating over its lifetime performance inthe face of all potential ranges of temperature rise.
Resilience measures that ensure employees can continue to work at more extreme
temperatures (e.g., air conditioning).

Rainfall••

Design for resilience to pluvial flooding.
Assessment of site drainage requirements.

Changes in cloud cover, wind speed or increasing temperature extremes•

Reduced reliance on imported energy and storage infrastructure.

Increased flooding•••

Flood risk assessment and planning.
Site installations outside of potentially affected zones.
Ensure flood defence systems and coastal management plans are adequate.

Increased coastal/ river erosion•

Shoreline management plans/ coastal erosion assessment

Landslides/ ground movement•

The potential for ground movement and landslides should be taken into accountwhen assessing sites for cement production infrastructure.
General risk mitigation measures:
•
•
•
•
3.2

Business continuity plans
Production restoration plans
System security standards
Employee capacity building

Risk reduction measures must be tolerant to a range of climate hazards and not lock-in
conditions that could result in maladaptation.

Area 4: The facilities do no harm to the climate resilience of the defined system they operate within, as indicated by theboundaries of and critical interdependencies with that system as identified in item 1 in this checklist.
4.1

The facilities themselves do not pose significant risk of harm to the system they arelocated within or others’ natural, social, or financial assets according to the principle of

Cement Criteria- Climate Bonds Initiative

P a g e | 26

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Adaptation and Resilience checklist for Cement Production Facilities
No.

(Note, if the facility shares the same site with a quarry, the applicant must consider both the production
plant and the quarry in the scope of the assessment)

Proof Given

Overall
Assessment

For verifier to complete

best available evidence during the investment period, taking into account theboundaries and critical interdependencies as defined in item 1 in this checklist.
Harm is defined as an adverse effect on any of the following items:
1. Adverse effects on local water bodies and water courses;
2. Air pollution from dust and other pollutants;
3. Relationships of the asset/project to nearby flood zones;
4. Reduction in pollinating insects and birds;
5. Reduction in biodiversity or High Conservation Value14 habitat;
6. Appropriation of land or economic assets from nearby vulnerable groups15.
Area 5: Additional requirements for facilities sharing a site with a quarry (facilities without an onsite quarry need notcomplete this section)
5.1

Evidence is provided of a viable Quarry Rehabilitation Plan16 which includes thefollowing details:
•
•
•
•
•
•

5.2

Post closure land use
Legal compliance
Progressive rehabilitation
Stakeholder engagement
Baseline conditions have been assessed
Presence of a monitoring plan

Evidence is provided of a viable Biodiversity Management Plan14 which includes thefollowing details:
•
•
•
•
•
•

Post closure land use
Legal compliance
Progressive rehabilitation
Stakeholder engagement
Baseline conditions have been assessed
Presence of a monitoring plan

Area 6: The applicant is required to demonstrate that there will be ongoing monitoring and evaluation of the relevance of therisks and resilience measures and related adjustments to those measures will be taken as needed (reporting is required basedon the term of certification, which depends on the finance instrument or asset being certified).
6.1

Indicators for risks identified under item 2 in this checklist are provided.

6.2

Indicators for risk mitigation measures identified under item 3 in this checklist areprovided.

6.3

Indicators for “fit for purpose” resilience benefit measures identified under item 4 inthis checklist are provided.

6.4

Applicants have a viable plan to annually monitor (a) climate risks linked to theinfrastructure, (b) climate resilience performance, (c) appropriateness of climate
resilience measure(s) and to adjust as necessary to address evolving climate risks.

6.5

Where production or operation has been interrupted, the extent of disruption (forexample in reduction in volume output or revenue) should be measured and reported,
together with the cause of the interruption. Any actions taken to reduce the risk offurther impacts should also be recorded.

14 High Conservation Value (HCV) habitat criteria in accordance with www.hcvnetwork.org
15 According to IFC Performance Standards
16 The GCCA provide thorough guidance on developing such plans: https://gccassociation.org/wp-content/uploads/2020/05/GCCA_Guidelines_Sustainability_

Biodiversity_Quarry_Rehabilitation_May_2020-1.pdf
Cement Criteria- Climate Bonds Initiative

P a g e | 27

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

5 Cement Criteria for entities and Sustainability-Linked Debt
(SLD)
The following sections detail similar, yet distinct, criteria depending on what is being certified:•••

A “Certified Entity” (in this case, an integrated cement production company, or a company which produces cement throughgrinding and blending but purchases the clinker, or a business segment carrying out those activities17) - See Section 5.1
SLD issued by such a company - See Section 5.2.
Section 5.3 contains methodological notes applicable to these requirements.

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 cement-specific requirements described here.
NOTE:

Current proposals would allow for the certification of only part of a company or group ofcompanies, or SLD that relates to only part of a company or group of companies. See the Climate
Bonds Standard v4.0 for full details. This flexibility enables the certification of the part of acompany or group of companies relating to cement production, separate from the certification ofother activities of the company or group of companies of which it forms a part.

5.1 Cement Criteria for Certified Entities
Two levels of entity certification are available, described in Table 9:
Table 9: Two levels of Entity Certification
Certification
Level
Level 1:
“Aligned”

Entity Certification Requirements

Climate mitigation criteria
1.

2.

3.
4.

At the time of certification, the Certified Entity’s cement production facilities average emissions
intensity (with correction factors applied as per Section 4.2.3) meets the entity-level pathway
threshold and their future Performance Targets to 2050 continue to meet those declining
thresholds (see Section 5.3.3); andIf the Certified Entity’s production facilities use hydrogen, biomass or alternative fuels and raw
materials (including municipal solid waste) as a fuel, then those fuels meet the cross-cutting
criteria in Section 6.1 to 6.3; andIf the Certified Entity’s production facilities employ CCS and/or CCUS, that CCS and/or CCUS
meets the criteria in Sections 6.4 and/or 6.5; andFor any plant becoming operational post certification date, that plant will meet the criteria
described in Section 4 from day 1 of commencing operation. Details of this to be provided in theTransition Plan.

Adaptation and Resilience Criteria
1.

All of the Certified Entity’s production facilities meet the adaptation and resilience criteria
described in Section 4.3, and that is reassessed and reconfirmed every five years.

17 Companies that only produce clinker, and not cement, cannot be certified.

Cement Criteria- Climate Bonds Initiative

See section 2.4 for details.
P a g e | 28

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Certification
Level
Level 2:
“Transitioning”

Entity Certification Requirements

The criteria are the same as for Level 1, except:
The Certified Entity’s cement production facilities average emissions intensity (with correction factors
applied as per section 4.2.3) does not meet the entity-level pathway threshold at the time ofcertification, but the future Performance Targets align with those entity-level emissions thresholds by
30 December 2030 and will continue to meet them after that date.

5.2 Cement Criteria for Sustainability-Linked Debt (SLD)Two tiers of SLB certification are available, described in Table 10.
Table 10: SLB Tiered Certifications
Certification
Level
Level 1:
“Aligned”

SLD Certification Requirements
Climate mitigation criteria
1.

2.

3.
4.

At the time of certification, the average emissions intensity (with correction factors applied as
per section 4.2.3) of the cement production facilities to which the Performance Targets of the
SLD are linked meet the entity-level pathway threshold and their future Performance Targets
to which the debt is linked continue to align with those declining thresholds through to 2050
(see Section 5.3.3); andIf the Certified Entity’s production facilities use hydrogen, biomass or alternative fuels and raw
materials (including municipal solid waste) as a fuel, then those fuels meet the cross-cutting
criteria in Section 6.1 to 6.3; andIf the Certified Entity’s production facilities employ CCS and/or CCUS, that CCS and/or CCUS
meets the criteria in Sections 6.4 and/ or 6.5; andFor any plant becoming operational post certification date, that plant will meet the criteria
described in Section 4 from day 1 of commencing operation. Details of this to be provided in
the Transition Plan.

Adaptation and Resilience Criteria
5.

Level 2:
“Transitioning”

All of the Certified Entity’s cement production facilities meet the adaptation and resilience
criteria described in Section 4.3, and that is reassessed and reconfirmed every five years.

The criteria are the same as for Level 1, except:
At the time of certification, the average emissions intensity (with correction factors applied as per
section 4.2.3) of the cement production facilities to which the Performance Targets of the SLD are linked
does not meet the entity-level pathway threshold, but the future Performance Targets for those facilitiesalign by 30 December 2030 and continue to align thereafter through to 2050 (see Section 5.3.3).

Cement Criteria- Climate Bonds Initiative

P a g e | 29

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

5.3 Methodological notes
5.3.1 Assessment at portfolio level
Assessment of whether the assessed entity’s cement production activities meet the emissions intensity threshold is determined at
a portfolio level. That is, the average emissions intensity across all of the cement production facilities is calculated, the correction
factor applied, and that correction factor-adjusted average is compared to the emissions intensity thresholds. It is not necessary toassess each facility separately.

5.3.2 Scope of emissions
The scope of emissions to be included is the same as those for individual production facilities. See Section 4.2.4.2 for details.

5.3.3 Entity-level emissions intensity thresholds for the Assessed Entity
The GHG emissions intensity metric is the same as for single or groups of facilities, as described at the start of Section 4.2.1.

Carbon intensity (tonnes CO2 per tonneof cementitious product)

The emission intensity thresholds for a cement production company are given in Table 11 and illustrated in Figure 6. To derive theappropriate threshold for the Assessed Entity, these must be adjusted according to the cement grade produced by the Assessed
Entity, done by applying the correction factors as described in Section 4.2.3, using the mass-weighted average strength grade
produced across the Assessed Entity.

0.65
0.60
0.55
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
2020

2025

2030

2035

2040

2045

2050

Year
Figure 6: The emissions pathway for all cement production companies (scope 1 & 2 emissions combined)

Cement Criteria- Climate Bonds Initiative

P a g e | 30

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Table 11: Threshold values forming the emissions pathway for all cement production companies
Carbon intensity

Carbon intensity

Carbon intensity

Carbon intensity

Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)Year(t CO2/ t cementitious
product)

2020

0.616

2028

0.494

2036

0.320

2044

0.145

2021

0.597

2029

0.478

2037

0.295

2045

0.127

2022

0.583

2030

0.463

2038

0.270

2046

0.108

2023

0.568

2031

0.440

2039

0.245

2047

0.089

2024

0.554

2032

0.416

2040

0.219

2048

0.070

2025

0.539

2033

0.392

2041

0.201

2049

0.051

2026

0.524

2034

0.368

2042

0.183

2050

0.032

2027

0.509

2035

0.344

2043

0.164

Note:

Based on the Science-Based Targets Initiative 1.5-degree pathway for cement18:
https://sciencebasedtargets.org/sectors/cement with the methodology accessible athttps://sciencebasedtargets.org/resources/files/Cement-guidance-public-consultation.pdf

5.3.4 Thresholds to be met every three years
The emissions intensity thresholds over time describe a smooth curve down over time. In reality, decarbonisation may likely resultin step changes in emissions levels. To reflect this, the Performance targets should align with the emission intensity threshold every
three years as a minimum, but annual alignment is not required.

6 Cross-cutting Criteria
The following criteria apply in any plant, measure or Certified Entity that is using the following as a fuel source:•••

Biomass, including residues, energy crops and lignocellulosic biomass - Section 6.1
Hydrogen - Section 6.2
Waste-Derived Fuels, including Municipal Solid Waste (MSW) - Section 6.3

Or is implementing:•

Carbon Capture and Storage (CCS) - Section 6.4

6.1 Additional criteria when using biomass as a fuelFor facilities or equipment using biofuels, the production of the biofuel must be demonstrated to meet the requirements set out insection 3.2 of the Climate Bonds Bioenergy Criteria19 which includes:
1.
2.

Meeting the relevant established GHG emissions threshold; andReduce the risk of indirect land use impact (iLUC).

18 Note: Companies cannot use verification by SBTi as demonstration of compliance.
19 www.climatebonds.net/files/files/standards/Bioenergy/Bioenergy%20Criteria%20Document%20Mar%202021.pdf

Cement Criteria- Climate Bonds Initiative

P a g e | 31

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

This criterion is applicable to first- and second-generation biofuels20 used as a fuel in kilns. It is not applicable to biogenic
components of alternative fuels such as municipal waste streams, criteria for which are in Section 6.3.

6.2 Additional criteria when using hydrogen as a fuelFacilities using hydrogen are eligible only if the hydrogen used meets the thresholds in Table 12:
Table 12: Carbon intensity thresholds for the life cycle emissions of hydrogen used as a fuel
2022

2030

2040

2050

(t CO2eq/t H2)(t CO2eq/t H2)(t CO2eq/t H2)

t CO2eq/t H2

3.00

1.90

1.0

0.6

Life Cycle GHG Assessment for hydrogen: Cradle-to-site boundary includes cradle-to-gate emissions plus any transportation
emissions to the site where a product is used. In this case, the life cycle assessment should follow ISO standards (ISO 14040 and
ISO 14044). The Recommendation 2013/179/EU will be acceptable for assets located in the EU. Results should be verified by anindependent third party.
Note:

The Climate Bonds Initiative is currently developing criteria for hydrogen. Once thehydrogen criteria are published, it shall supersede the requirements set in this section.

6.3 Additional criteria when using Waste-Derived Fuels
Any plant or Assessed Entity using waste-derived fuels must demonstrate the following criteria are satisfied:1.

All waste of recycling potential21 must be removed prior to burning in line with the waste hierarchy
All waste- or refuse-derived fuel to be used must either be:••2.

Sourced from a sorting facility that has removed all recyclable waste in line with the Climate Bonds Waste
Management Criteria22.
- or Pre-processed on site to remove all recyclable waste in line with the Climate Bonds Waste Management Criteria.

Municipal solid waste will not be eligible as a fuel type after 2035
2035 is set provisionally as the year after which point Municipal Solid Waste will no longer be considered an eligible fuel source
for cement production. This does not yet apply to other wastes such as forestry residues and agricultural wastes.
Note, this will be continuously reviewed in light of technological availability. If alternative fuel technologies have notmaterialised by this point, the cut-off year may be delayed further. Vice versa, if technology advances more rapidly, an earlier
point may be considered23.

20 Rationale for a feedstock-agnostic approach can be found in the Bioenergy Criteria.
21 For example, glass, paper, metals, some plastics.
22 www.climatebonds.net/files/files/standards/Waste%20Management/Crit%20Waste%20Management%20Criteria.pdf
23 Certification will not be revoked retroactively from applicants already certified who no longer meet updated criteria

Cement Criteria- Climate Bonds Initiative

P a g e | 32

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

6.4 Additional criteria for Carbon Capture & Storage (CCS)CCS equipment, both as an individual measure and as part of a whole facility being evaluated, is eligible so long as there is evidence24
that demonstrates the CO2 will be suitably transported and (if being stored and not utilised) stored in line with the criteria below:
Component

Requirements
1.

Transport

2.
1.

2.
Storage

3.

The CO2 transported from the installation where it is captured to the injection point does notlead to CO2 leakages above 0.5 % of the mass of CO2 transported.
Appropriate leakage detection systems are applied and a monitoring plan is in place, with thereport verified by an independent third party.
Characterisation and assessment of the potential storage complex and surrounding area, or
exploration25 is carried out in order to establish whether the geological formation is suitable foruse as a CO2 storage site.
For operation of underground geological CO2 storage sites, including closure and post-closure
obligations:a. appropriate leakage detection systems are implemented to prevent release during
operation;b. a monitoring plan of the injection facilities, the storage complex, and, whereappropriate, the surrounding environment is in place, with the regular reports
checked by the competent national authority.
For the exploration and operation of storage sites, the activity complies with ISO
27914:201722526 for geological storage of CO2.

Furthermore, the use of any certification scheme would be encouraged. Examples of certification schemes include the U.S. EPA
Class VI well certification, which includes Reservoir Characterisation27. Another example includes the DNV GL certification
framework to verify compliance with the ISO 27914:2017 Carbon dioxide capture, transportation and geological storage - Geologicalstorage28.
Note:

There is no further criteria on capture rate for CCS when the bond is financing a whole
facility, group of facilities, or company. Only when the investment is financing CCS as a
specific measure as per section 3.1 must CCS achieve a minimum capture rate.

6.5 Additional criteria for Carbon Capture, Utilisation and Storage (CCUS)
CCS equipment, both as an individual measure and as part of a whole facility being evaluated, is eligible when the CO2 is used ineither:• Curing carbonation of concrete (also known as concrete curing);• Concrete waste mineralisation (for example, to produce SCM); or• Production of recyclable products such as PET.
CO2 should not be used for products that release the CO2 immediately when these are used (such as in urea, carbonated beverages,
or fuels), nor for enhanced oil recovery, and the production of other forms of fossil energy sources.

24 Either directly from the applicants or through contracts or agreements with a third party
25 “Exploration’ means the assessment of potential storage complexes for the purposes of geologically storing CO

2 by means of activities intruding into thesubsurface such as drilling to obtain geological information about strata in the potential storage complex and, as appropriate, carrying out injection tests in orderto characterise the storage site
26 ISO Standard 27914:2017, Carbon dioxide capture, transportation and geological storage - Geological storage: www.iso.org/standard/64148.html)
27 www.epa.gov/uic/class-vi-wells-used-geologic-sequestration-co2
28 www.dnv.com/news/dnv-gl-launches-certification-framework-and-recommended-practice-for-carbon-capture-and-storage-ccs--108096

Cement Criteria- Climate Bonds Initiative

P a g e | 33

Climate Bonds Initiative - Cement Criteria Document
Updated: April 2023

Appendix A: TWG and IWG members
CBI Technical Lead Advisor:
Cyrille DunantCambridge University, United Kingdom

TWG Observers:
Estefania Marchan

Rocky Mountain Institute (RMI)

TWG Members
Prof Karen Scrivener

École polytechnique fédérale deLausanne (EPFL), Switzerland

Georg Holtz

Wuppertal Institute für Klima,
Umwelt, Energie, Germany

Li JuanChina Building Materials Academy China

Prof Vanderley John

Universidade de São Paulo,
BrazilZhi Cao

University of Antwerp, Belgium

Kira West

TNO, Netherlands

Ioanna Kourti

European Bank for Reconstruction andDevelopment (EBRD), United Kingdom

Cassio Xavier

TNO, Netherlands

Prof Mark Alexander

University of Cape Town, South Africa

IWG Members
Adam Gustafsson

UBS Asset Management

Ken Zhong

PWC

Asja Hossain

Bayern LB

Leanne Bloch-Jorgensen

National Australia Bank

Atul Sanghal

Emergent Ventures

Dr Ma Weiping

West China Cement Ltd

Daniel Kricheff

Affirmative Investment Management

Marine Durrieu

ISS ESGDiana Via

PCS

Mayur Mukati

Sustainalytics

Douglas Farquhar

NN Investment Partners

Ravi Chandra Chikatimalla

JSW Cement

Francesca Fraulo

Sustain Advisory

Samuel Mary

Pimco

Giuseppe Cosulich

Credit Suisse

Weitai Gao

CCXGF

Jean Hetzel

NSF

Zonta Yung

SGS Hong Kong

Kaboo Leung

Pimco

All TWG and IWG participants were members of these organisations at the time of criteria
development. However, some may have since moved organisations.

Appendix

P a g e | 34