What? Cedar LNG is a planned floating LNG liquefaction facility off the coast of British Columbia, co-owned by Pembina Pipeline Corporation and the Haisla Nation. Cedar LNG signed a 20-year agreement with ARC Resources in March 2023, in which ARC would supply natural gas and then receive LNG to sell on the market. How? The 20-year agreement covers the supply and liquefaction of 200 million cubic feet per day of natural gas, transforming it into the equivalent of 1.5 million tonnes per annum of LNG, representing approximately half of the Cedar LNG facility’s total production. As a toller, ARC Resources owns every step of the value chain from natural gas origination upstream to the liquefaction and further to point of sale, insulating Cedar LNG from the risks of both selling LNG downstream and securing feedstock. The facility will be powered entirely with renewable electricity, boosting the sustainability criteria of the LNG produced. The $3.4 billion in capital costs of the project are expected to be financed 60% through asset-level debt from a consortium of banks and 40% as equity, split between Pembina Corp. and the Haisla Nation using committed capital through the First Nations Finance Authority. Impact: This agreement and tolling contracts with other buyers proved to investors a sufficient mitigation of both the demand and feedstock risks, allowing the project to reach a positive FID in 2024, with deliveries expected to begin in 2028. Cedar LNG will be the world‘s first LNG facility majority-owned by an Indigenous community.CASE STUDY 11 Cedar LNG tolling agreement between Pembina Pipeline Corporation and the Haisla Nation Issue green bonds to attract impact investors Lever 10 Funding Source Public funding Industry funding Institutional funding Pathways (relevance of guideline by pathway, low = nice to have vs. high = must have) HEFA Alcohol-to-Jet G-FT Power-to-Liquid High Medium Medium Medium Lifecycle (relevance of guideline by pathway, low = rarely applicable vs. high = very common) Pre-feasibility Feasibility + FEED FID Construction Commissioning Low Low Low High High Green bonds are issued by governments, companies or financial institutions to raise funds specifically earmarked for environmentally friendly products. SAF producers can leverage these bonds towards the production, development and infrastructure of SAF. In addition, airlines could also unlock sustainability- linked bonds where the bond conditions are linked to SAF uptake. This also works as a de-risking mechanism for offtake agreements. Demand signals coming from airlines would be much stronger, as they would be bound to make SAF purchases to ensure access to the bond financing. Airports could also attract sustainability-linked bonds to invest in SAF infrastructure. To unlock financing through green bonds, SAF producers need to comply with a green financing taxonomy.19 The aim of such a taxonomy is to prevent greenwashing and help investors navigate and select truly sustainable investments. This is achieved through a standardized framework that classifies and defines what constitutes environmentally sustainable economic activities. Airlines could unlock sustainability -linked bonds where the bond conditions are linked to SAF uptake. This also works as a de- risking mechanism for offtake agreements. Financing Sustainable Aviation Fuels 36

Financing Sustainable Aviation Fuels 2025