Electrical Utilities Criteria Frequently Asked Questions

The Electrical Utilities Criteria, published by the Climate Bonds Initiative in March 2024, provide a framework for certifying electrical utilities and related debt instruments. The criteria are aligned with a 1.5-degree science-based decarbonisation pathway to net zero by 2050, focusing on reducing emission intensity and phasing out fossil fuel generation.

• The criteria prohibit any new investment in fossil fuel facilities and mandate the phase-out of all fossil fuel generation by 2040 at the latest. Additionally, parent companies must commit to zero future expansion of fossil fuel activities, including exploration, extraction, transport, and refining, and phase out fossil fuel trading by 2040.
• Certification is available for electrical utility entities, sustainability-linked debt (SLD), and use-of-proceeds (UoP) bonds. UoP bonds can specifically finance the decarbonisation of fossil fuel assets through mitigation measures such as carbon capture and storage (CCS), carbon capture utilisation and storage (CCUS), or co-firing with low-carbon synthetic fuels or solid biomass.
• The framework establishes a global emission intensity pathway based on International Energy Agency (IEA) data to achieve net-zero emissions by 2040. Entities are categorized as 'align' if they meet the pathway at the time of certification, or 'transition' if they will meet it by the end of 2030.
• The criteria allow for regional differences in phase-out benchmarks for unabated fossil plants, distinguishing between advanced and emerging economies. For example, unabated coal plants in advanced economies must be phased out by 2030, whereas emerging economies have until 2040.
• To maintain grid security, the criteria permit switching coal generation to fossil gas under strict conditions: the gas capacity must not exceed the replaced coal facility's capacity, the entity's average emission intensity must remain below the sector pathway, and a phase-out plan must be in place.
• The scope of emissions assessed includes Scope 1 direct combustion for all generation facilities, Scope 3 for electricity purchased for distribution or trading, and specific life-cycle emissions for hydropower, geothermal, 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} }