Project Finance GHG Emissions Analysis

From Open Risk Manual


Project Finance GHG Emissions Analysis is an alternatives analysis required by the Equator Principles under the Equator Principle 10 (Reporting and Transparency) in the context of Project Finance.

The alternatives analysis requires the evaluation of technically and financially feasible and cost-effective options available to reduce Project-related GHG emissions during the design, construction and operation of the Project.

For Scope 1 Emissions, this analysis will endeavour to ascertain the best practicable environmental option and will include consideration of alternative fuel or energy sources if applicable.

Where an alternatives analysis is required by a regulatory permitting process, the analysis will follow the methodology and time frame required by the relevant process.

For Projects in high carbon intensity sectors, the alternatives analysis will include comparisons to other viable technologies, used in the same industry and in the country or region, with the relative energy efficiency, GHG efficiency ratio, as appropriate, of the selected technology.

High Carbon Intensity Sectors indicatively include but are not limited to the following:

  • oil and gas
  • thermal power
  • cement and lime manufacturing
  • integrated steel mills
  • base metal smelting and refining, foundries, pulp mills and
  • (potentially) agriculture.

Following completion of an alternatives analysis, the client will provide, through appropriate documentation, evidence of technically and financially feasible and cost-effective options and justification on why the selected technologies were not selected. This does not modify or reduce the requirements set out in the applicable standards (e.g. IFC Performance Standard 3).

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