EU Council approves green taxonomy criteria

December 17, 2021

The first two chapters of the EU’s sustainable taxonomy rules have been passed by member states and will come into force at the start of next year.

The passing of the rules, which got the green light on 9 December, comes despite 13 member states attempting to block the list as it did not include nuclear energy and gas.

The criteria, which was compiled by the Sustainable Finance Platform, covers renewable energy, car manufacturing, shipping, forestry, and bioenergy.

It also includes a technology-neutral benchmark set at 100 grams of carbon dioxide emissions per kilowatt-hour for any investments in energy production.

Fiona Reynolds, CEO of the Principles for Responsible Investment, said: “The adoption of the first set of EU Taxonomy criteria is a significant achievement, as it sets into law for the first time a common understanding of which and to what extent activities covered are environmentally sustainable.”

She added that it was crucial that the EU’s taxonomy criteria remained based on the “best available scientific evidence”.

It is now expected that the European Commission will outline the second delegated act, which covers nuclear and gas, on 22 December 2021.

However, sustainable investment association Eurosif said the inclusion of natural gas and nuclear energy would “change the nature of the EU Taxonomy from a list of sustainable activities to a list of transitional activities”. It indicated that it was maintaining its stance that these areas should not be included in the taxonomy rules.

The association added: “Even if these sectors may be needed in the short-term to secure energy supply, they will play a limited role in the energy transition in the longer term as pointed out by the IEA in its 2050 Net-Zero roadmap. Therefore, our view remains that they should ideally not be included in the Taxonomy as sustainable economic activities.”