EU experts threaten to quit over changes to taxonomy

Nine members of the Platform on Sustainable Finance, which is responsible for overseeing future development of the EU’s green taxonomy, have said that they may “reconsider” their positions following revelations that the EU is planning to loosen the eligibility criteria for gas, forestry and bioenergy.

According to a draft legal text leaked in March, the European Commission (EC) is considering amendments to the taxonomy’s green labelling rules which would make the funding of new gas-fired plants sustainable in cases where they are used to replace existing power and heat generation systems running on fossil fuels other than gas.

In addition, the updated draft would enable gas fired-plants which operate less than 2,000 hours to be classified as a ‘transition’ activity due to its role in “guarantee[ing] the reliability of electricity supply”. Other changes include the removal of requirements for smaller forestry holdings to conduct climate benefit analysis – potentially making it easier to claim taxonomy alignment, and looser criteria for forest biomass which can be burned for power generation.

Revisions to the taxonomy were made after eastern and southern EU member states threatened to veto an earlier draft which excluded gas-fired plants and nuclear power from the taxonomy criteria. RI understands that both are now likely to be added in, as part of a political compromise between the interests of pro-nuclear France and a number of pro-fossil Members States.

In an open letter criticising the plans, the nine experts said the updated criteria for forestry, bioenergy, and fossil gas was “in clear contradiction to climate science” and warned that it would “openly discredit the European Green Deal, leading to significant reputational damage for the EU”.

“We are concerned that the time and effort we invest – pro-bono – in developing science-based criteria could be undone by lobbying behind the scenes,” the letter continued. “Should politics and lobbying prevail over science, it is our responsibility to inform you that we would be forced to reconsider our contribution to the Platform.”

Signatories to the letter include WWF economist Sebastian Godinot, academic Andreas Hoepner, Club of Rome President Sandrine Dixson-Declѐve and other representatives from industry and the finance sector. The Platform was created in 2020 to steer the development of the taxonomy’s classification rules and provide advice on the EU’s broader sustainable finance agenda. 

Not all experts agree with the letter though, with one former member of the EU’s Technical Expert Group on Sustainable Finance – the Platform’s predecessor – telling RI it was “a storm in a teacup”. 

“The gas ‘allowance’ in the taxonomy is tiny, restricted only to a few geographical areas that currently rely on coal, has to be applied to district heating CHP, and can only be done for five years,” he added. 

The latest move suggests that the Commission will continue to face pushback over the proposed changes. It comes after scientists, investors and other member states wrote independently to the Commission expressing their opposition to the plans.

This puts the EC in a difficult position as it needs the support of EU member states, including those who insist that gas should be considered a transition fuel, to approve the draft taxonomy which is scheduled to be published later this month. Should the Commission succeed, it will then have to secure the backing of Parliament, which also appears to be split on the proposal across party lines.