Triodos to avoid UK green bond amid ‘blue’ hydrogen inclusion

The sustainable asset manager Triodos Investment Management will not invest in the first £15bn (€17.6bn) UK green Gilt to be issued shortly.

The funding effort still leaves Britain as a latecomer to the green bond market, with most western European countries including Ireland, Spain and Belgium having sold such debt.

The green gilt does not meet the firm’s strict criteria for green bond eligibility because it will finance investments in blue hydrogen and carbon capture and storage (CCS), according to William de Vries, head of impact equities and bonds at the firm.

Blue hydrogen is made from natural gas and requires byproduct carbon dioxide to be captured, whereas green hydrogen is produced from renewable sources through water.

It cannot be excluded that the CCS financed through the green bond will be used for sectors that could very well decarbonise through other technological developments. Hence, it cannot be excluded at this time that the CCS provides a lock-in to fossil fuel use, where viable alternatives exist.

Both are integral to the U.K. government’s plan to cut emissions, with the nation planning to issue at least 15 billion pounds ($21 billion) in debt this fiscal year to finance such projects.