Posted on 09 December 2021
Despite opposition from France, Poland, Hungary and others, the EU’s first list of ‘sustainable’ sectors for investors will now become law (1).
Some EU governments had threatened they would block the first ‘taxonomy’ list if nuclear and gas were not included as ‘sustainable’ in the second list, which is expected to be proposed soon. In the end, 13 governments opposed it (2) - 2 Member States short of the blocking threshold (3) - and the proposal went through automatically.
The newly adopted taxonomy list covers around a hundred economic activities divided into nine sectors (4).
Importantly, the fact that this first set of sectors has now been approved frees the European Commission of the bullying by France and others on including nuclear and gas in the second one. The Commission can and must now scrap these harmful sectors from the second proposal.
Sebastien Godinot, Senior Economist at WWF European Policy Office, said:
“France and its cronies tried to bully the EU Commission into including nuclear and gas in the second Delegated Act, but this blackmail has fallen flat. Critically, the Commission’s hands are now untied, and it can and must deliver a science-based taxonomy regulation that excludes fossil gas, nuclear, and factory farming. Otherwise, the credibility of the taxonomy would be ruined, it would do worse than the existing green bond market (5), and would demolish the EU’s claim to global green finance leadership.”
Pierre Cannet, Director of Advocacy and Campaigns at WWF France, said:
"It’s hard to believe that France pushed for a rejection of this climate taxonomy list and is ready to spoil years of work. After the commitments made by President Macron at COP26 to honour the 1.5°C goal and to move beyond oil and gas, France campaigning for the inclusion of gas in the taxonomy sounds like a triple betrayal. A betrayal of climate science, of the objective of the taxonomy and of increasing financial actors supporting its exclusion. We are calling on President Macron to stop this attempt to greenwash fossil gas for so-called national interests. The credibility of France is at stake ahead of its presidency of the European Council."
While many of the final criteria in the first taxonomy list are robust, there is a glaring error. The proposal categorically classifies industrial logging and the burning of trees and crops for energy - potentially harmful both to climate and nature - as ‘sustainable’ investments, because of the counterproductive lobbying from Sweden and Finland. WWF assessed these criteria as unscientific, and strongly criticised them, not least because of the climate and conservation risks associated with some types of biomass. However, the text contains a rapid review clause for both bioenergy and forestry, which is the opportunity to bring the rules in line with climate science as soon as 2022.
Henry Eviston, Sustainable Finance Policy Officer at WWF European Policy Office, said:
“The rules on bioenergy and forestry are totally unscientific, and they risk harming both our climate and nature. There is still hope, however: the Act contains two clauses to revise those criteria next year. WWF calls on the Commission to start the revision immediately before these taxonomy criteria have negative impacts on our planet”.
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- The Commission’s register for the first climate taxonomy Delegated Act has been updated and now states "scrutiny finished”, confirming it is automatically approved by the Council: https://webgate.ec.europa.eu/regdel/#/delegatedActs/1435.
- The following article from Global Capital reports the 13 following Member States: France, Finland, Sweden, Poland, Hungary, Czech Republic, Bulgaria, Romania, Slovakia, Malta, Cyprus, Croatia, Greece (https://www.globalcapital.com/article/29f1c3xzvuixwvniercw0/sri/mixed-feelings-as-taxonomy-set-to-pass-divided-council).
- The qualified majority required to block a Delegated Act is at least 15 Member States representing at least 65% of the EU population (double threshold).
- The nine sectors for the climate mitigation objective are as follows: 1) Forestry (2) Environmental protection and restoration activities (3) Manufacturing (4) Energy (5) Water supply, sewerage, waste management and remediation (6) Transport (7) Construction and real estate activities (8) Information and communication; and (9) Professional, scientific and technical activities.
- The existing global green bond market excludes both fossil gas and nuclear.