EU hit with legal action over ‘green’ label for gas in taxonomy

Four environmental groups have taken legal action against the European Commission over its decision to label gas as “green” in the EU taxonomy.

On Tuesday, ClientEarth, the WWF European Policy Office, Transport & Environment, and Friends of the Earth Germany equivalent BUND filed a case in the Court of Justice of the European Union. They said the desired result would be a ruling that forces the commission to review the taxonomy delegated act, which classifies some gas and nuclear activities as sustainable.

The legal action follows an initial request for the commission to review its decision, which was filed in September. The NGOs received the commission’s response in February.

ClientEarth public finance lawyer Marta Toporek told Responsible Investor: “We are challenging the commission’s response to our request for it to revise its decision on gas. The commission told us that there were no grounds for revision and that it believed it had done everything correctly.”

Henry Eviston, sustainable finance policy officer at the WWF European Policy Office, said: “The commission either didn’t answer our points to our satisfaction, didn’t bring any evidence to back statements, such as the availability of renewables, or didn’t address our criticisms at all.”

Last July, the European Parliament approved the delegated act following months of lobbying from some member states to protect nationally sensitive sectors. Critics – who include the commission’s own taxonomy advisers – have slammed the changes as a political compromise that is fundamentally inconsistent with the green taxonomy’s science-based approach.

According to the four NGOs involved in the legal action, the delegated act clashes with EU laws including the Taxonomy Regulation itself, the European Climate Law – which includes a legally binding target for the European Union to reach climate neutrality by 2050 – and the EU’s obligations under the Paris Agreement.

Toporek said the commission did not carry out a climate consistency assessment in line with the requirements of the European Climate Law. The environmental groups have also made claims relating to the Do No Significant Harm (DNSH) principles in the taxonomy.

The taxonomy specifies that each gas-related activity must meet specific emission thresholds, should replace an existing coal facility that cannot be replaced by renewables, achieve certain targets regarding emissions reductions, and fully switch to renewable or low-carbon gases by 2035.

The NGOs said that classifying gas as “green” under the taxonomy risks increasing the EU’s dependency on the energy source due to potential additional demand.

“Ultimately, we don’t think gas is sustainable, so we want it to be removed from the taxonomy altogether,” said Toporek. “It sends signals that you’re investing in something green, when really it should be phased out.”

In response to the lawsuit, a spokesperson for the commission said: “We take note of the legal action undertaken by several NGOs in relation to the taxonomy [complementary delegated act] under the Aarhus Regulation, following our reply to their initial requests.

“We will not comment on the substance of the case before EU Court judgments are delivered. The Commission stands ready to defend its reply to the Aarhus request on the taxonomy CDA in front of the court.”

A hearing at the general court is expected to be held in the second half of 2024 and a judgement released in 2025.

Separately, eight Greenpeace organisations filed a lawsuit on Tuesday at the ECJ over the commission’s inclusion of nuclear and gas in the taxonomy.