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The amount of green bonds issued in Europe is set to rebound to record levels this year, taking global issuance to an all-time high, as revived interest in energy security during the US-Iran war helps to offset falling issuance in the US.
A record $242bn of European green-aligned bonds were issued in the first half of 2026, according to the Climate Bonds Initiative, a UK-based NGO. Total global issuance is on track to exceed the $673bn sold in 2024, the previous record year, when issuance in Europe totalled $385bn.
This year’s European green bond revival strikes a markedly different chord from the US, where issuance is expected to fall for the second year running as companies pull back from burnishing their green credentials out of fear of retaliation from Washington.
“In Europe, we have not really seen this kind of death of ESG that was very much present in the US,” said Larissa de Barros Fritz, senior fixed-income strategist at ABN Amro. “This year, the whole ESG story is back.”
She added: “It’s not that [US companies] don’t care about ESG or the energy transition. It’s much more of a ‘greenhush’. They’re doing it, but they are not putting the label on it . . . there’s a lot of political influence and backlash.”
US President Donald Trump has pursued a so-called Drill Baby Drill agenda to promote the use of fossil fuels and has celebrated terminating “hundreds of Biden-era Green New Scam projects”.
Green bonds are a type of debt sold by corporations and governments to raise capital for spending on environmental projects. Their prominence has grown over the past decade, most significantly in Europe where the market is most mature and where sellers and asset managers have been eager to demonstrate their environmental, social and governance credentials.
Around $374bn of green bonds were sold in Europe last year, according to the Climate Bonds Initiative, about 55 per cent of global issuance. This year, the continent is on track to deliver almost two-thirds of new green debt worldwide.
“Last year was very much marked by a sort of step back in ESG agendas . . . in Europe to a lesser extent. Nevertheless, there could have been some spillover [from the US],” said de Barros Fritz.
Juan Valencia, a European credit strategist at Société Générale, said the volume of green bonds being issued in Europe was rising “very quickly”.
“We suspect volumes will rise well above last year’s numbers and 2024 levels to set a new record,” he said.
Global green debt sales flatlined in 2025 as European and North American issuance dipped amid the Trump administration’s anti-ESG agenda and as issuers waited for regulatory clarity. Despite this, rising issuance in China helped to keep levels close to the previous year’s total.
Sales in Europe last year were hampered by issuers awaiting the rollout of the EU’s voluntary but tougher green bond standards and the International Capital Market Association’s fresh guidance on green bonds.
US green debt sales peaked in 2021 with $94bn sold. Issuance has since declined, with $77bn raised last year and expectations that it will fall again in 2026, after bonds with a value of just $34bn were sold in the first half.
“[Europe’s] increase in market share has helped offset declines in green bond issuance from the US,” said Mitch Reznick, head of fixed income at Federated Hermes.
Utilities companies have been particularly strong issuers in 2026, as Europe has renewed its focus on energy security following the energy shock from the US-Iran war. Valencia at Société Générale predicted that the market would continue to grow on the back of an acceleration in the green transition.
In June, Spain’s Iberdrola raised €1.5bn by issuing two green bonds, while German-based and Chinese-owned EEW Energy from Waste raised €550mn. In February, EDF raised €2.75bn through green bonds.
“The energy transition story did lose a bit of breath last year and now it’s regaining traction,” de Barros Fritz said.
“With the US-Iran conflict there was a lot of demand for utilities debt and the whole idea about the energy transition has regained a lot of attention.”