3FOOD

Third Industrial Revolution Consulting Group
Europe 2020 targets concerning non-emission trading scheme greenhouse gas emissions.
Increased levels of investment are required.
Environmental fiscal reform opportunities exist in Luxembourg as well: Luxembourg has among
the lowest scores of the EU member states on enacting taxes to address energy efficiency and
sustainability in the mobility, construction, agriculture, and water sectors. 248
1.2.3.2 Green Bond Market
The Delaware SEU sustainable energy bond was the first of its kind to be issued in the United
States. The DE SEU $72.5 million bond offering is a part of a larger ‘green bond’ market. Europe
in general, and Luxembourg in particular, are strong promoters of the green bond market.
Indeed, Luxembourg offers an ideal environment for climate finance as it can be seen as the
world’s green bond capital. 249 In addition, Luxembourg is well-positioned to drive and benefit
from further green bond market growth. For example, the Luxembourg Stock Exchange (LuxSE)
was the first stock exchange to list a green bond in 2007. Today, with more than 80 green
bonds listed by 20 issuers in 19 currencies, LuxSE is by far the leading exchange at international
level for this asset class.
In 2007, the European Investment Bank (EIB) pioneered the green bond option and, to date, the
EIB is the largest green bond issuer with €10 billion issued. Of particular interest in the context
of a Luxembourg SEF approach is the EIB’s repositioning of its role in the green bond market:
green bond issuance is now an “autonomous strategic goal” of the EIB’s Corporate Operational
Plan 2015-2017. The EIB’s Climate Awareness Bond (CABs) series is a solid example of this new
objective: the EIB is building a benchmark yield curve and has, so far, issued five CABs in EUR to
raise the profile of the market. The current CAB yield curve sports three benchmarks: a) one
€400 million issuance at 11/2019 (4 years) maturity and 1.34% interest; b) two 11/2023 (8
years) issuances, one €400 million and the other €600 million, both at 0.5% interest; and c) two
11/2026 (11 years) issuances at €250 million each and both at 1.25% interest. The EIB is,
therefore well positioned to support the SEF approach in conjunction with the Luxembourg
financial centre. 250
248 European Commission (2016). Study on assessing the environmental fiscal reform potential for the EU28.
Eunomia Research and Consulting, IIEP, Aarhus University.
249 LuxembourgForFinance (2016). Financing climate change action – find out why Luxembourg offers an ideal
environment for climate finance. Document can be accessed at:
http://www.luxembourgforfinance.com/en/financing-climate-change-action
250 The roll-out of further green bonds is supported by the market’s increasing attention to environmental and
financial integrity through the Green Bond Principles. However, to use the green bonds as a part of a larger
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