EU Taxonomy: Commission presents Complementary Climate Delegated Act to accelerate decarbonisation
3 Feb 2022 02:21 PM
The European Commission recently (02 February 2022) presented a Taxonomy Complementary Climate Delegated Act on climate change mitigation and adaptation covering certain gas and nuclear activities. The College of Commissioners reached a political agreement on the text, which will be formally adopted once translations are available in all EU languages.
A great deal of private investment is needed for the EU to become climate neutral by 2050. The EU Taxonomy aims to guide private investment to activities that are needed to achieve climate neutrality. The Taxonomy classification does not determine whether a certain technology will or will not be part of Member State energy mixes. The objective is to step up the transition, by drawing on all possible solutions to help us reach our climate goals. Taking account of scientific advice and current technological progress, the Commission considers that there is a role for private investment in gas and nuclear activities in the transition. The gas and nuclear activities selected are in line with the EU's climate and environmental objectives and will allow us to accelerate the shift from more polluting activities, such as coal generation, towards a climate-neutral future, mostly based on renewable energy sources.
In particular, the recent Complementary Climate Delegated Act:
- Introduces additional economic activities from the energy sector into the EU Taxonomy. The text sets out clear and strict conditions, under Article 10(2) of the Taxonomy Regulation, subject to which certain nuclear and gas activities can be added as transitional activities to those already covered by the first Delegated Act on climate mitigation and adaptation, applicable since 1 January 2022. These stringent conditions are: for both gas and nuclear, that they contribute to the transition to climate neutrality; for nuclear, that it fulfils nuclear and environmental safety requirements; and for gas, that it contributes to the transition from coal to renewables. More specific additional conditions apply for all the above activities and are specified in the recent Complementary Delegated Act.
- Introduces specific disclosure requirements for businesses related to their activities in the gas and nuclear energy sectors. To ensure transparency, the Commission recently amended the Taxonomy Disclosures Delegated Act, so that investors can identify which investment opportunities include gas or nuclear activities and make informed choices.
The text of the Complementary Delegated Act follows expert consultations with the Member States Expert Group on Sustainable Finance, and the Platform on Sustainable Finance. The Commission has also listened to feedback from the European Parliament on the matter. The Commission has carefully examined the input received from those groups and took it into consideration in the text presented recently. For instance, as a result of the feedback, targeted adjustments to the technical screening criteria and disclosure and verification requirements were introduced to reinforce their clarity and usability.
Members of the College said:
Valdis Dombrovskis, Executive Vice-President for an Economy that Works for People, recently said:
“Our mission and obligation is climate neutrality. We need to act now if we are to meet our 2030 and 2050 targets. Today's Delegated Act is about accompanying the EU economy in the energy transition, a just transition, as a bridge towards a green energy system based on renewable energy sources. It will accelerate the private investment we need, especially in this decade. With today's new rules, we are also strengthening transparency and disclosures of information, so that investors make informed decisions, thereby avoiding any greenwashing.”
Mairead McGuinness, Commissioner in charge of Financial Services, Financial Stability, and Capital Markets Union, recently said:
“The EU is committed to achieving climate neutrality by 2050 and we need to use all the tools at our disposal to get there. Stepping up private investment in the transition is key to reaching our climate goals. Today we are setting out strict conditions to help mobilise finance to support this transition, away from more harmful energy sources like coal. And we are boosting market transparency so that investors will be able to easily identify gas and nuclear activities in any investment decisions.”
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