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Kommuninvest i Sverige AB

Swedish municipalities and county councils in cooperation for beneficial financing of welfare.

Lobbying Activity

Response to Climate change mitigation and adaptation taxonomy

18 Dec 2020

Kommuninvest, the Swedish local government funding agency, welcomes the Taxonomy as a tool to define and promote sustainable activities. However, we have several concerns: •The total burden is too high, in terms of excessively demanding criteria requirements, a non-proportional administrative burden and non-consideration of regional contexts. Moreover, the Taxonomy lacks pragmatic usability guidance. •We fear that project owners (our customers) will lose interest if information requirements are too onerous and choose funding options requiring less disclosure. Ultimately, the sustainable finance market rests on the availability of eligible assets. •The Taxonomy does not ensure technology neutrality and disregards numerous sustainable economic activities. •For financial intermediaries who are not project owners, the cost/benefit of Taxonomy alignment does not add up, and risks our ability to contribute to the sustainable finance market. The aims of the Acts, to ”ensure usability and proportionality” and being ”easy for economic operators and investors to use”, are not met. Our key feedback: Governance & usability • Complying with DNSH requirements should be simplified. Where relevant national or EU legislation exists, compliance should mean a ‘tick the box’-exercise where project owners confirm legislation is respected. The credit institution should not be required to verify such statement, unless it receives indications on non-compliance. • Liability for fulfilling Taxonomy requirements and for accuracy of data should be on the project owner, clarification is needed. Criteria that requires ex-post data gathering is unwelcome, results in increased administrative burden and is contrary to current market practice. Construction and Real Estate Activities • Modify ‘7.1 Construction of New Buildings’ so that i) alignment is made by fulfilling one of the following: either NZEB-requirements for new buildings -20% or EPC class A; ii) Global Warming Potential is limited to the A1-A5 stages of the life cycle; iii) climate adaptation assessment requirements apply only for specifically identified risks; iv) requirements for circular design are postponed; v) restrictions for building on forest land are limited to regions where forest is scarce. • Modify ‘7.7 Acquisition and Ownership of Buildings’, so that alignment is made by fulfilling one of the following: either EPC class A, or NZEB-requirements for new buildings -20% or top 15% of building stock in relevant subcategory or buildings that fulfil renovation requirements according to 7.2 within three years. • Provide guidance on when to apply 7.1 and 7.7. • For material recovery rate and water appliance efficiency, use relevant EU directives and policies, as opposed to introducing new requirements for the Taxonomy. Energy • Bioenergy fulfilling requirements for sustainability and GHG-savings of RED II should be classified as a sustainable activity, and not as only transitional. Bioenergy is classified as a renewable energy source in other international frameworks, and also opens up for negative emissions (BECCS). Criteria for biofuels should follow RED II as regards both GHG-savings and the 20 MW-limit, to lessen the administrative burden for smaller operations. • Waste to energy should be included as a transitional activity under certain conditions, given the need for efficient energy recovery from waste that cannot be recycled. Water supply, sewerage, waste management and remediation • Demands on energy use and increased energy efficiency for water and wastewater treatement are very high and should be balanced vs local preconditions (topography, climate) and the primary purpose to enhance water treatment. Current criteria would effectively unqualify a many necessary investments, where energy efficiency is not the main green objective. Transport •Vehicles operating on biofuels fulfilling GHG-savings and sustainability requirements according to RED II should be accepted.
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Response to Institutional investors' and asset managers' duties regarding sustainability

12 Jun 2018

I provide these comments as Head of Sustainability for Kommuninvest, Sweden's largest issuer of green bonds. Kommuninvest proposest that Article 9.1 (i): “ avoiding incineration and disposal of waste” (see Chapter II - Environmentally sustainable economic activities) is amended, to read: ” avoiding incineration and disposal of waste; however acknowledging that energy generation based on waste incineration may be qualified under specific conditions.” Rationale: Kommuninvest supports the Commission’s proposal for actions that minimize the generation of waste and especially fossil components. However, Kommuninvest believes that for the foreseeable future substantial amounts of fossil waste will nevertheless be generated, and which is not suitable for reuse due to material fatigue, unclean mixes of materials and fractions, and undesirable chemicals content. Advanced solutions for waste to energy recovery is a desirable and necessary solution for waste treatment, in a manner that optimizes available energy sources, increases energy production and contributes to a reduction in potent greenhouse gases (GHGs). Sweden, which has the highest share of renewables in the energy system of any European Union country, has demonstrated how waste incineration can be deployed in an environmentally-friendly way to replace fossil fuels. The expansion of district heating and its conversion of energy inputs, from fossil fuels to biomass and waste, is the main factor behind Sweden’s reduced CO2 emissions over the past decades. Environmental benefits from waste incineration: Advanced exhaust purification technology, and the avoidance of landfill deposits with potentially damaging environmental consequences through methane leakage, means energy recovery through waste incineration may be considered to have positive environmental effects. In 2017, Kommuninvest commissioned Profu, a Swedish envirotech consultancy, to develop a methodology for calculating the net CO2-effect of district heating in Sweden to be used in Kommuninvest’s first Green Bonds impact report, published in March 2017. This resulted in the development of a national-average-baseline emission factor for district heating, and also included an additional environmental benefit due to the avoidance of land fill and methane leakage of 170 g CO2 per kWh of energy generated from waste. The factor is dependent on the type of waste being studied and the extent to which methane gas is collected and used at land fills. The environmental benefit can be expected to decrease over time, as methane gas capture becomes more efficient. In the European Union waste is still incinerated without energy recovery or land-filled with subsequent leakage of methane. There is a shortage of waste to energy capacity. Deploying appropriate technology, waste incineration can contribute to both increasing energy generation and reducing highly potent GHGs. Kommuninvest’s view on fossil energy content: Kommuninvest offers Green Loans to finance a range of green investment projects; in renewable energy, energy efficiency, green buildings, public transport and water management. As of 31 May 2018, SEK 27.5 billion (EUR 2.75 billion) had been approved for more than 150 investment projects in over 80 municipalities and county councils / regions. To finance the Green loans, Kommuninvest issues Green Bonds. Kommuninvest has issued four Green Bonds amounting to a total of SEK 17.5 billion (EUR 1.75 billion), making it Sweden's largest issuer of green bonds. The maximum fossil fuel component for district heating projects that Kommuninvest allows is generally 10 percent (with peat being is treated as a fossil energy source); including the fossil component of waste used for energy extraction the share of fossil energy is a maximum 20 percent.
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Meeting with Mette Toftdal Grolleman (Cabinet of Commissioner Jonathan Hill) and Municipality Finance Plc / Kuntarahoitus Oyj (in Finnish)

26 May 2016 · CRR/CRD; Leverage Ratio

Meeting with Marlene Madsen (Cabinet of Vice-President Jyrki Katainen)

25 May 2016 · Leverage ratio