The compromise between gas and nuclear energy was facilitated by the fact that the Commission chose to include the two controversial energy sources in the taxonomy in a single delegated act, meaning that Member States and the European Parliament can reject or adopt the whole proposal. [56] This led the Commission to formally propose the inclusion of nuclear and gas materials in the taxonomy in February 2022. [51] The delegated complementary law on climate change was approved in principle by the Commission in February 2022, but has not yet been formally adopted. It is the most controversial of the three delegated acts and has revived the debate on the inclusion of nuclear energy and natural gas in the taxonomy. The delegated act includes certain activities in the gas and nuclear sectors in the taxonomy as transitional activities that contribute significantly to climate change mitigation. The inclusion of these activities follows the publication of two reports, one by the TEG in 2019 and the second by the Joint Research Committee (JRC) in 2021, as well as consultations with the PSF and the Member States` expert group, which reached different conclusions. [24] A vote on the rejection of this law in the EP did not obtain the required majority. [33] Gas and nuclear legislation has been the subject of intense lobbying by EU governments and industries for more than a year. The taxonomy does not prohibit investing in activities that are not labeled “green,” but it does limit companies and investors can designate as climate-friendly.
On the other hand, the report published by the JRC concluded that the effects of nuclear energy would remain below harmful levels with currently available technologies and within the current legal framework. The report was examined by a Commission expert group (Member States` experts on radiation protection and waste management, the “Article 31 Expert Group”), which gave it a positive assessment, while the Scientific Committee on Health, the Environment and Emerging Risks (SCHEER) criticised the approach of assessing compliance with the `no significant harm` principle. [24] [40] The Platform for Sustainable Finance, which includes various stakeholders, NGOs and international institutions[41], expressed concerns about the inclusion of nuclear energy in the taxonomy in a report published in January 2022, arguing that nuclear activities should not be considered taxonomies as they do not guarantee compliance with the principle of “do not cause significant harm”. The PSF also noted that the technical review criteria for new nuclear power plants would cover facilities licensed to construct by 2045. Therefore, it is possible that nuclear activities that start operation too late may also not achieve the objective of making a significant contribution to reducing the effects of climate change, given that the objective of climate neutrality must be achieved by 2050. [42] The 6. In July 2022, the European Parliament voted against a resolution rejecting the third delegated act to include nuclear energy and natural gas in the taxonomy. 278 MPs voted in favour, while an absolute majority of 353 votes was required. [57] The EU taxonomy is a classification system that establishes a list of environmentally sustainable economic activities. It could play an important role in helping the EU increase sustainable investment and implement the European Green Deal. The EU taxonomy would provide businesses, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable.
In this way, it aims to provide certainty for investors, protect retail investors from greenwashing, help businesses become more climate-friendly, mitigate market fragmentation and help move investments to where they are most needed. The publication of the first delegated act was accompanied by the adoption of a Commission Communication entitled “EU taxonomy, corporate sustainability reports, sustainability preferences and fiduciary duties: aligning finance with the European Green Deal”, which aimed to provide key messages on how the Sustainable Finance Toolbox facilitates access to finance for the transition. This Communication builds on the report on transitional finance adopted by the Platform for Sustainable Finance in March 2021. The development of the EU taxonomy is based on numerous contributions from experts from business and civil society. For this reason, the mission of the Sustainable Finance Platform is to advise the European Commission on the further development of the EU taxonomy, improve its usability and examine its extension to social objectives, activities that significantly harm the environment or environmentally neutral activities. As is often the case, the EU is the world leader in developing a green classification system, with other jurisdictions likely to follow. The UK, in particular, is seeking to develop a taxonomic regulation and is currently questioning the EU`s technical selection criteria. Meanwhile, the Chinese government has developed its own taxonomy and is working with the EU to align the two approaches, with the aim of normalizing a green financial system. As the EU implements all its sustainability reporting legislation, we could see the “Brussels effect” fully come into force, as many countries and regions follow the EU`s lead. Despite its potential to provide sustainable funding to its promoters, the EU taxonomy remains voluntary. [15] It will be made available to companies and investors wishing to improve their climate and environmental deployments in order to use it as an adaptable framework. For those who wish to build on the EU taxonomy, there is a definition of achievable and coherent objectives that provide a common understanding of what green economic activities are and are therefore part of the EU`s environmental objectives.
[16] [17] In July 2018, a group of technical experts was tasked with drafting the first draft of the technical assessment criteria and ensuring that these criteria are consistent with the EU`s climate change objectives. This led to the submission of the first EU taxonomy proposal in March 2020. [18] It set six environmental objectives to be achieved through economic activity to be included in the EU taxonomy. The 6 EU environmental objectives set out in the Taxonomy Regulation are:[13] This webinar is aimed at practitioners involved in disseminating EU taxonomies. The session will provide an overview of the latest PRI research on how investors approach the implementation of the taxonomy. It will also include a roundtable discussion with practitioners and policy experts, followed by a question-and-answer session. Panelists will discuss. The fourth criterion of the EU taxonomy refers to technical solutions to reduce emissions and is currently based on a draft of the 2020 Technical Expert Group.
In April 2021, the first details on the two environmental objectives of climate change mitigation and adaptation were published. Detailed information on the remaining four environmental targets is expected later this year (2021). It is expected that this information will be regularly updated to reflect current state of the art. [Region: EU] Regulation (EU) 2020/852 (European taxonomy of sustainable economic activities) establishes disclosure requirements for certain financial market participants and undertakings. This briefing note provides an overview of the EU taxonomy, including a proposal for a delegated act on gas and nuclear energy.
