Electrical Utilities Criteria Frequently Asked Questions

The Electrical Utilities Criteria establish requirements for the certification of electrical utilities and their debt instruments, focusing on a transition to net-zero emissions by 2050. The framework employs an entity-level approach to assess the decarbonisation of the entire electricity value chain, including generation, transmission, and distribution. Certification requires entities to meet a global emission intensity pathway and adhere to specific fossil fuel phase-out benchmarks, which vary between advanced and emerging economies. The criteria prohibit new investments in fossil fuel power generation and mandate a total phase-out of fossil fuel generation by 2040 at the latest. To support grid security, the criteria allow the replacement of coal with fossil gas under strict conditions, provided the entity maintains its emission intensity pathway and has a phase-out plan. Eligible mitigation measures for Use-of-Proceeds (UoP) bonds include retrofitting plants with carbon capture and storage (CCS), carbon capture utilisation and storage (CCUS), or cofiring with low-carbon synthetic fuels and biomass. Certification is available in two tiers: 'align' for those meeting the pathway at the time of certification, and 'transition' for those meeting it by the end of 2030.

• The Electrical Utilities Criteria prohibit any new investment in fossil fuel power generation and require all fossil fuel generation to be phased out by 2040 at the latest to ensure the power sector is green before 2050.
• To maintain grid security, the criteria permit switching coal generation to fossil gas if the gas capacity does not exceed the replaced facility's capacity, the entity's average emission intensity remains below the sector pathway, and a phase-out plan is in place.
• Certification is offered in two tiers based on when an entity meets the sector transition pathway: 'align' for those meeting it at the time of certification, and 'transition' for those meeting it by the end of 2030.
• Use-of-Proceeds (UoP) bonds can be certified for specific mitigation measures, such as CCS or CCUS with a 90% capture rate, or 100% cofiring with low-carbon synthetic fuels or solid biomass.
• The criteria assess a comprehensive range of emissions, including Scope 1 direct combustion for all generation facilities, Scope 3 for electricity purchased for distribution or trading, and specific life-cycle emissions for bioenergy, solar, and wind.

APA

Climate Bonds Initiative (2024). Electrical Utilities Criteria Frequently Asked Questions. https://www.climatebonds.net/files/drupal-files/files/cbs-electrical-utility-criteria%20-%20faqs.pdf

Chicago

Climate Bonds Initiative. Electrical Utilities Criteria Frequently Asked Questions. 2024. https://www.climatebonds.net/files/drupal-files/files/cbs-electrical-utility-criteria%20-%20faqs.pdf.

Wikipedia

{{cite report |author=Climate Bonds Initiative |title=Electrical Utilities Criteria Frequently Asked Questions |date=March 2024 |url=https://www.climatebonds.net/files/drupal-files/files/cbs-electrical-utility-criteria%20-%20faqs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatebondsinitiative2024electrical, author = {{Climate Bonds Initiative}}, title = {{Electrical Utilities Criteria Frequently Asked Questions}}, institution = {Climate Bonds Initiative}, year = {2024}, month = mar, url = {https://www.climatebonds.net/files/drupal-files/files/cbs-electrical-utility-criteria%20-%20faqs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }