Australia set new guidelines on the types of projects eligible for sustainable finance, aiming to accelerate investment in emissions reduction in polluting industries like agriculture, mining and energy.

The 198-page taxonomy, which sets voluntary standards, adds to similar sets of rules issued in more than 40 locations globally, and outlines the asset types and activities that are seen as credible to be funded using green debt or transition debt instruments.

New rules offer “a clear, science-aligned guide to help direct capital towards Australia’s green economic transformation by reducing uncertainty and strengthening investor confidence,” Guy Debelle, the taxonomy technical body co-chair, and a former Reserve Bank of Australia deputy governor, said in a statement. The guidelines set by the Australian Sustainable Finance Institute also cover manufacturing, construction and transport.

Prime Minister Anthony Albanese’s government set the country’s first legally-binding emissions reduction plans in 2022, though has faced criticism for so far failing to develop more ambitious targets for 2035 and beyond. Energy transition investment in Australia fell about 5% to $22.6-billion in 2024, according to data compiled by BloombergNEF.

Australia’s new taxonomy includes more detailed guidelines for the mining sector than most similar rulebooks, setting specific emissions thresholds and reduction targets through 2050 for lithium, copper, nickel and iron ore production. It also includes specific human rights provisions and safeguard policies for Indigenous Australians.

“The taxonomy will be an important factor in accelerating capital flows supporting Australia’s climate and environment objectives,” Katharine Tapley, global head of sustainable finance at ANZ Group Holdings, said in the statement.

Still, Australia’s guidelines are voluntary rather than mandated, and use emissions intensity metrics rather than focus on absolute emissions levels.

India is among other nations currently developing similar new rules, and released a draft taxonomy framework last month.

Australia will carry out an implementation pilot program over the next eight months with participants including the country’s four largest banks and pension funds, the sustainable finance institute said.