The role of the EU Green Bond Regulation in accelerating sustainable finance in the Baltic region

The European Union (EU) Green Bond Regulation aims to further align private investments with the Paris Agreement, minimise greenwashing and enhance transparency, offering a robust framework for European Green Bonds. While the academic research actively explores green bonds as part of the investment portfolio or environmental, social and governance agenda, relatively less interest is dedicated to the regulatory challenges. The aim of this paper is to analyse the impact of the EU Green Bond Regulation on the Baltic green bond market, focusing on its implications for market development, regulatory harmonisation and sustainable finance practices. The study combines a comprehensive literature review with an analysis of the EU Green Bond Regulation, the EU Taxonomy Regulation and related frameworks such as the Sustainable Finance Disclosure Regulation and the Climate Bonds Standard. The findings reveal that Baltic green bond market remains dominated by the state-owned enterprises that currently comply with international standards and EU regulations. The EU Green Bond Regulation, while stimulating market development, introduces overlapping requirements that may create administrative burdens and additional costs for issuers, especially the private segment.