Carbon & Climate Finance Luxembourg

4Climate supported the Luxembourg Ministry for Sustainable Development as a long term strategy and policy advisor in the design and implementation of its carbon credit purchase programme for compliance with the Kyoto Protocol (2006-2015) and the EU Effort Sharing Regulation, which complements the EU Emissions Trading Scheme.
Since 2015, 4Climate is proud to be able to further assist the Ministry by advising on the development of the Luxembourg international climate finance programme and its strategy as well as new products for a competitive and a greener financial system, including the development of a new sustainable development finance platform (2017).

    Luxembourg has made its first experiences with carbon finance by contributing to the financing of low carbon projects through buying carbon credits from projects in developing countries and Eastern Europe for Kyoto Protocol compliance. Since then and following the UNFCCC call to the international community to mobilise USD 100 billions per year from 2020 for financing the low carbon transition in developing countries, Luxembourg has committed EUR 120 millions from 2014-2020 as international climate finance funding for developing countries. These funds are additional to the Official Development Aid (1% of the Luxembourg GDP). The government has taken the strategic decision to develop Luxembourg into a leading hub for sustainable finance and has laid out, together with the Luxembourg Climate Finance Task Force, a climate finance strategy and the foundations for the development of a Luxembourg Climate Finance Tool Box including, the

    • Luxembourg Green Stock Exchange, LGX, first of its kind and No. 1 stock exchange for green bonds
    • Luxembourg-European Investment Bank (EIB) Climate Finance Platform, a EUR 30 million first loss guarantee platform for innovative, high impact climate funds
    • Luxembourg Climate Finance Label and Green Bond Label for investment funds from LuxFLAG
    • Luxembourg Climate Fund Accelerator and a Luxembourg Sustainable Development Finance Platform, which is under development
      • Development of carbon credit procurement options, project selection criteria, project evaluation procedures.
      • Preparation of Clean Development Mechanism (CDM) and Joint Implementation (JI) transactions under the Kyoto Protocol, bi-lateral investment programmes in green technologies: project evaluation, transaction due diligence & technical structuring, carbon credit purchase contract negotiation support, carbon credit portfolio monitoring:
        • Technical assistance in the contracting of carbon credits under various transaction structures from projects in over 10 different countries.
        • Review of over 60 projects in more than 20 developing countries in various sectors, e.g. landfill gas to energy, wind, biomass energy, energy efficiency in residential and municipal buildings, small hydropower, waste to biogas, cookstove projects.
        • Monitoring of the carbon portfolio and its timely carbon credit deliveries for compliance.

Advisory on selection criteria for activities supported by Luxembourg international climate finance programme. Contribution to the preparation of the climate finance strategy and ongoing products of the Luxembourg Climate Finance Tool Box. Technical assessment of individual low carbon projects or programmes to be supported by public climate finance funding.