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Top Five Green Bond Markets, by Value in 2021

Industry: Investment Banking
Current: Market Sizing & Shares

United States of America, Germany, France, China and the Netherlands were the top five green bond markets (by value) in 2021
United States of America was the leading green bond market in 2021. The market value of green bond in United States of America recorded a value of $67,648 million, up 29.9% YoY
Germany ranked second with a market value of $51,098 million in 2021, up 22.1%, with the other three markets (France, China, and the Netherlands) having a cumulative market value of $88,628 million in 2021

Top Five Green Bond Markets, by Value in 2021

Climate change is one of the biggest issues globally. The world is already facing the effects of climate change such as extreme storms, frequent wildfires, regular drought, etc. The public and the private sector are aiming to tackle climate change issues by reducing pollution, keeping their carbon emissions in check, optimum utilization of natural resources, sustainability practices, and to work on these solutions requires finance. One of the trending financial instruments available to companies, who are taking such environmental issues seriously and working towards a sustainable future, are Green Bonds.

Green bonds are like regular bonds but with a key distinguishing factor – they are used exclusively to raise money to promote environmental projects, be it related to renewable energy resources such as solar, wind, hydro, and nuclear, or practices that promote sustainable agriculture and forestry, sustainable water management, clean transportation such as electric vehicles, and green buildings. There are different types of green bonds such as: Use of Proceeds Bond (to finance green projects), Use of Proceeds Revenue Bond (to refinance green projects), Project Bond (for specific green projects), Securitization Bond (to refinance portfolios of green projects), among others.

The first green bond was issued by the European Investment Bank (EIB) in 2007. Strong demand from investors and sustainable initiatives taken by governments worldwide is driving growth within this market. Tax incentives and similar favorable rules and regulations, associated with green bonds, offered to issuers and investors, will boost the green bond market in the coming years as well.

The global green bond market has been growing exponentially. The US, Germany, France, China and the Netherlands were the top five green bond markets (by value) in 2021, with the US leading the pack. The market value of green bond in the US was recorded at a value of $67,648 million in 2021, up 29.9% YoY. Germany ranked second with a market value of $51,098 million in 2021, up 22.1%, with the other three markets (France, China, and the Netherlands) having a cumulative market value of $88,628 million in 2021.

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