Recital 12

(12)The proceeds of European Green Bonds should be used to finance economic activities that have a lasting positive impact on the environment. Such lasting positive impact can be attained in several ways. Since fixed assets are typically long-term assets, a first way is to use the proceeds of European Green Bonds to finance fixed tangible or fixed intangible assets that are not financial assets, provided that those fixed assets relate to economic activities that meet the taxonomy requirements. Since financial assets can also be used to finance economic activities with a lasting positive impact on the environment, a second way is to use the proceeds of European Green Bonds to finance financial assets, provided that the proceeds of those financial assets are directly, or indirectly through subsequent financial assets, allocated to economic activities that meet the taxonomy requirements. It should be possible to allocate those financial assets to a maximum of three subsequent financial assets in succession and issuers should ensure that it is possible for external reviewers to review effectively the final allocation of proceeds. Since the assets of households can also have a lasting positive impact on the environment, a third way is to use the proceeds of European Green Bonds to finance the assets and expenditure of households. Moreover, since capital expenditure and selected operating expenditure can be used to acquire, upgrade or maintain fixed assets, a fourth way is to use the proceeds of European Green Bonds to finance capital and operating expenditure that relate to economic activities that meet the taxonomy requirements or that will meet those requirements within a reasonably short period from the issuance of the bond concerned, provided that the issuer has published a plan to expand economic activities that are aligned with Regulation (EU) 2020/852 (‘taxonomy-aligned’) or to allow economic activities to become taxonomy-aligned in accordance with Annex I to Commission Delegated Regulation (EU) 2021/2178 ⁸ (CapEx plan). Finally, issuers should be able to allocate proceeds from one or more outstanding European Green Bonds to a portfolio of fixed assets or financial assets (‘portfolio approach’), provided that they demonstrate in allocation reports that the total value of fixed assets or financial assets in their portfolio exceeds the total value of their outstanding bonds.