As the European Union moves forward with what might become globally recognized standards for green investing, the European Commission has published the details of a classification system for sustainable economic activities known as EU Taxonomy.
However, as had been signalled in advance, the Commission has for the moment avoided contentious decisions surrounding investments in natural gas and nuclear power, as well as the entire area of agribusiness. By the end of 2021 there will be a separate legal act clarifying sustainability in these sectors.
The Commission's draft, published on April 21, will now be scrutinized by the European Parliament and the individual member-states of the European Council.
The rules are aimed at helping investors switch their investments to green technologies and sustainable companies.
The package includes an EU Taxonomy Climate Delegated Act, which aims to support sustainable investment by making it clearer which economic activities most contribute to meeting the EU’s environmental objectives. The Taxonomy sets out detailed screening criteria for activities that can be considered green.
According to the Commission, the Delegated Act already covers around 40% of listed companies in sectors that account for nearly 80% of direct greenhouse gas emissions in Europe. These include energy, forestry, manufacturing, transportation and buildings.
Natural gas power generation was not included in the list. The German Association of Energy and Water Industries (BDEW) described this as bad news, saying that valuable time is being lost by excluding gas-fired power from the classification.
"We now need sensible rules that, under certain conditions, define gas as a transitional activity within the meaning of the EU Taxonomy," says Kerstin Andreae, chairwoman of the BDEW management board.
For secure power supply, Germany needs new gas-fired power plants, she stresses. This power capacity must be built now, and though initially operated with natural gas, these power plants must be technologicially capable of using hydrogen as an energy source in the future, and thus ultimately become climate-neutral.