Green bonds in Europe

Green bonds are used to finance activities that support climate and environmental objectives. In 2025 green bonds raised EUR 287 billion, a 91% increase compared to 2020, reaching 8.0% of all bonds issued by corporations and governments across the EU. The issuance of green bonds is likely to increase, given the ambitious decarbonisation goals of the Clean Industrial Deal and the strong uptake of the EU Green Bond Standard.

Figure 1. Green bonds as a percentage of total bonds issued by corporations, by governments, and by both corporations and governments in the EU-27, 2014-2025.

The European Green Deal emphasises the need to direct capital flows to green investments. One way to achieve this is by issuing green bonds, which, supported by the EU Sustainable Finance Framework, raise finance for projects that help achieve environmental and climate objectives. Additionally, the Competitiveness Compass emphasises the need to better mobilise investments for a more competitive, innovative and decarbonised Europe.

Green bond issuance increased significantly in the EU between 2014 and 2025, from 0.7% to 8.0% of total bonds issued in terms of proceeds. This indicates an increasing demand to finance sustainable investments, driven in part by the European Green Deal and the need to fund the transition to a low-carbon, green economy.

Green bonds can be issued by various types of entities under multiple standards, each following different levels of ambition. Both corporate and government green bond issuance share follows two distinct trends over the past five years: a rapid expansion up to 2022, followed by a general decline thereafter. For corporations, the green share of total bonds issued rose from 2.8% in 2020 to a peak of 7.1 % in 2022, before easing back to 5.4% in 2025. Governments and supranationals show the same pattern, with the green share climbing from 2.2% in 2020 to 6% in 2022, then falling to 2.6% in 2025. Despite this broad-based decline, corporations remained the dominant issuer group, accounting for 67.6% of the total value of green bonds issued in the EU in 2025, or EUR 194 billion

Green bonds are increasingly used by companies to finance sustainable investments, indicating a broader greening of the EU economy. The European green bond standard (EuGBS), entered into force in December 2023, strengthens this trend by enhancing transparency and ensuring that financed projects align with EU Taxonomy. According to ESMA, the softness in 2025 green bond issuance volume was led by steep declines in sovereign and supranational issuance.

Issuance under the voluntary EuGBS has reached EUR 32.6 billion, until April 2026. The European Investment Bank leads on market share, with a EUR 7 billion cumulative issuance. Denmark is the first Member State to issue, as a sovereign a green bond under the EuGBS raising DKK 7 billion in 2025.

Figure 2. Shares of green bonds issued by corporations and by governments in 2025, by EU Member State

Green bond issuance as a share of total bond issuance varies across the EU Member States. In 2025, the share of green bonds was highest in Sweden, Austria and Greece, where green bonds represented more than 17% of bonds issued. In contrast, six Member States did not issue any green bonds in 2025.

The speed at which national green bond markets develop and mature depends on many variables, including policy and regulatory factors, market conditions and financing trends. Further growth in the issuance of green bonds across the EU faces a range of challenges, including fragmented capital markets in Europe, insufficient pipelines of standardised green projects ready for green bond funding, and a cooling investor appetite.

The EuGBS, which coexists with established market standards, aims to help raise ambition and establish new best practices for the green bond market overall.

Supporting information

Definition

Bonds

According to International Capital Market Association (ICMA), a bond is defined as a form of debt security. Bonds are loans provided by an investor to a borrower that are widely used to fund activities. The borrower agrees to pay back the loan with interest at a specified future date. Bonds can be used to finance a wide range of projects, and the proceeds are not necessarily earmarked for any particular purpose. In practical terms, bonds are financial instruments issued by entities such as corporations or governments to raise capital. Investors purchase these bonds, effectively lending money to the issuer, who in return agrees to pay periodic interest and repay the principal amount at a specified maturity date. Within the European Union, bonds play a significant role in financial markets by providing companies and governments with access to funding, while offering investors opportunities for portfolio diversification and income generation.

Green bonds

Green bonds are types of bonds committed to financing or re-financing investments, projects, expenditure or assets helping to address climate and environmental issues. Both governments and companies use them to finance the transition to a more sustainable and low-carbon economy.

Green bond frameworks and standards

This indicator only includes those green bonds that are either aligned with the four core components of the International Capital Market Association (ICMA) green bond principles or are certified by the Climate Bond Initiative (CBI).

EU Green Bond Standard

The EU Green Bond Standard establishes a new and clear gold standard for green bonds. Eighty-five percent of the bond’s proceeds must be aligned with the EU Taxonomy technical screening criteria (this flexibility pocket has not been used by any of the issuers assessed). The standard is accessible to all issuers, including non-EU issuers, on a voluntary basis.

Types of green bond issuers

Green bonds can be differentiated by the entity that issues them. For instance, corporate green bonds are issued by a corporate entity, such as a company or financial corporation. Sovereign green bonds are issued by a national government. Supranational green bonds are issued by an international body such as the EU, which started to issue green bonds in 2021 under the NextGenerationEU Green Bonds programme, or by international financial institutions (IFIs) such as the European Investment Bank, the lending arm of the EU. Data providers also differentiate green bonds issued by subnational entities such as municipalities or agencies from other types of green bond. Green bonds issued by agencies are usually securitised by a government-sponsored enterprise or a government department.

EU taxonomy for sustainable activities

The EU Taxonomy for sustainable activities is a classification system that defines sustainable activities, e.g. activities that contribute to climate change mitigation, climate adaptation sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, protection and restoration of biodiversity and ecosystems, while at the same time not significantly harming any of these objectives and meeting minimum social safeguards.

Methodology

This indicator is calculated based on data on the issuance of green bonds by companies, including financial institutions, and governments in the EU. The indicator shows green bond issuance as a percentage of all bonds issued and by type of green bond issuer. Data on corporate and government bonds were provided by LSEG. Green bond indicators such as this may contain discrepancies, as they rely on data provided by various commercial data providers, which report on issuances at different dates and rely on different green bond standards or frameworks. Moreover, numbers from the same data provider can vary depending on the date of data download and the currency exchange rate used, impacting comparability.

It is important to note that the indicator does not provide information on the environmental impact, or the sustainability of the projects financed by green bonds. In addition, the indicator does not capture the varying ‘greenness’ levels of the projects financed by different bonds or the contribution of financed projects to achieving the Paris Agreement goals, which are increasingly important factors for investors and regulators. Finally, fixed-income instruments cover only parts of the financial system, and this green bond indicator therefore only partially reflects trends in financing green assets. Those trends might be different for different environmental objectives depending on the financial preferences and the ‘bankability of the projects and activities funded.

Policy/environmental relevance

This indicator is a headline indicator for monitoring progress towards meeting targets of the Eighth Environment Action Programme (8th EAP). It contributes mainly to monitoring in relation to aspects of 8th EAP Article 3(u), which requires ‘mobilising resources and ensuring sufficient sustainable investments from public and private sources… consistent with the Union’s sustainable finance policy agenda’. The European Commission communication on the 8th EAP monitoring framework specifies that this indicator should be used to monitor the ‘increase [in] the issuance of green bonds to boost public and private financing for green investments’.

Data sources and providers

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Green bonds in Europe

Figure 1. Green bonds as a percentage of total bonds issued by corporations, by governments, and by both corporations and governments in the EU-27, 2014-2025.

Figure 2. Shares of green bonds issued by corporations and by governments in 2025, by EU Member State

Supporting information

Metadata

References and footnotes