The chair of the Platform on Sustainable Finance, Nathan Fabian, reaffirmed the Platform’s intention to propose the creation of an intermediate category in the EU taxonomy for investments that are not fully environmentally friendly but can play a role in the environmental transition, during an exchange on Tuesday 15 March in the European Parliament with the Committee on Economic and Monetary Affairs (ECON) and the Committee on the Environment, Public Health and Food Safety (ENVI).
The ‘Platform on Sustainable Finance’, made up of some 50 stakeholders advising the European Commission on the EU taxonomy - a classification system to determine whether an economic activity is considered environmentally sustainable in order to guide private investment - issued a highly critical opinion on the inclusion, via a complementary delegated act, of fossil gas and nuclear energy in the taxonomy as “transitional” activities (see EUROPE 12875/9, 12860/1).
“The overall assessment of the Platform on the complementary delegated act of the taxonomy is that the criteria for economic activities are not in line with the taxonomy regulation requirements (regulation 2020/852), the 1.5 degree objective (Paris Agreement), and the 2030 and 2050 set of climate goals”, Mr Fabian reminded the members of the ECON and ENVI committees.
In his view, the main problem with this complementary delegated act is that it classifies as ‘green’ economic activities that “are not green today”, but “could only be green in the future”.
He went on to add: “It needs to be clear that the transition activities in the complementary delegated act do not mean green today.
The Platform on Sustainable Finance intends to publish a “report on an extended taxonomy” by the end of March, proposing an intermediate category (amber category) for these activities.
“We believe this is a better option to describe the multiple transitions on multiple environmental objectives for multiple economic sectors that we now need to embrace”, said Mr Fabian.
Asked by Simona Bonafé (S&D, Italy) and Paul Tang (S&D, Netherlands) about the usefulness of such a category and the risk that it would slow down investment in renewables, the Platform chair said that an intermediate category “helps the transition” and “would assist renewables more than undermine them”.
“If you are significantly harmful today, but you can make it to ‘amber’ and ‘green’ one day, then you need finances for your transition plan. We need to make it legitimate to improve and attract finances, and this is what the extended category of taxonomy can assist with.
Towards opposition from the Parliament?
Presented by the European Commission on 2 February (see EUROPE 12882/1), the delegated act could still be rejected by the Parliament, if a majority of its members decide to support a motion of rejection in a plenary vote that is likely to take place in a few months’ time (the co-legislators have four months to oppose it, with the option of requesting a two-month extension).
According to speeches by some MEPs, this vote could be influenced by the war in Ukraine, which has highlighted the imperative for the EU to move away from its dependence on imported Russian energy sources.
“Does the Commission seriously think that Russian nuclear and gas should be labelled sustainable?” asked Sirpa Pietikäinen (EPP, Finland).
Bogdan Rzońca (ECR, Poland), for his part, asked whether the delegated act should not be amended to take account of the “current tragic situation”.
Emma Wiesner (Renew Europe, Sweden) said that the European Commission “needs to rethink” the inclusion of gas in the taxonomy, “particularly given the war”.
César Luena (S&D, Spain) and Silvia Modig (The Left, Finland) called for the rejection of the delegated act, arguing that it is not in line with the EU’s science and policy objectives. (Original version in French by Damien Genicot)