Sign in
Australia’s first green bond met with high demand: Australia’s debut sovereign green bond has attracted over three times the AUD 7 bn (USD 4.7 bn) worth of debt that is set to mature in June 2034, Bloomberg reports. The green bond — with an average yield of 4.295%, which is around 1.5 basis points below Australia’s May 2034 bond — garnered such high demand likely due to a lack of green assets in the country, according to macro rates strategist at RBC Capital Markets Robert Thompson. Premiums on green debt are rare as governments and corporations globally turn to sustainable finance for cheaper funding costs.
And there’s more to come: Australia plans on issuing more green bonds with different maturities in the future. The country plans on using the proceeds from green bonds to support the energy transition, mainly through hydro-power and marine renewable energy. Nuclear energy is excluded, according to the government’s green bond framework (pdf). Australia is currently one of the highest emitters among developed countries and has been slow in meeting its Paris Agreement pledges, but has placed high hopes in its new green bond and expects it “to be well sought after and trade with a greenium,” says senior portfolio manager at Jamieson Coote Bonds James Wilson.
EUR bns in government subsidies are not enough to keep Europe’s steel industry on the path to achieving net zero goals, The Financial Times reports, citing research by the World Benchmarking Alliance (WBA). Carbon emissions from heavy industries like steel must decline three times faster than the current rate if they are to meet the 1.5 C target by 2030, WBA says.
The top companies have received over EUR 8 bn: The European Commission has given steel producers over EUR 8 bn in state aid since 2022 to help reduce carbon emissions, FT writes, citing NPO Aria. Europe’s largest steel producer ArcelorMittal received EUR 3 bn worth of subsidies for decarbonisation projects to swap out coal for natural gas and then hydrogen. German firms like Thyssenkrupp and Salzgitter have been given EUR 2 bn and EUR 1 bn in commitments respectively.
Global demand for steel is on the rise + it’s key for the energy transition: Currently, steel production is at more than 1.8 mn metric tonnes annually — accounting for about 7% of greenhouse gas emissions — with demand expecting to grow as steel will be used for projects like wind turbines, electrolysers, and EVs, Reuters writes. Nearly 50 new near-zero projects have been announced with delivery dates as early as next year, yet 70 will be needed to be operational by 2030 in order to meet demands and align with net-zero goals.
OTHER STORIES WORTH KNOWING ABOUT THIS MORNING-
- South Korea to boost investment in African minerals: South Korea has pledged USD 10 bn in development aid to African countries to secure mineral resources. The country also pledged USD 14 bn in export financing to support investment by South Korean companies in Africa. (Reuters)
- Italian subsidies for onshore wind get approval: The European Commission has given the green light for Italy’s state aid scheme for renewable energy, which will go to setting up nearly 4.6 GW of new capacity from sources like offshore wind, geothermal, biogas, and marine energy. Set to run until 2028, the initiative will be funded through a consumer levy on electricity bills. (Reuters)
