Posted on March, 09 2020

The EU’s finance sector will take strides for the climate if the European Commission follows just-published expert advice. Investments in nuclear power, gas and some types of bioenergy should not be counted as sustainable under the EU forthcoming rules or ‘taxonomy’, according to the Commission’s technical expert group (TEG)’s report today. 
 
The TEG also wants the taxonomy to include a category of unsustainable investments, which WWF has been repeatedly calling for, to show the worst economic areas for the planet.
 
However, the report is too lax on areas like forestry and hydropower, and still includes types of bioenergy which increase emissions compared to fossil fuels, like purpose grown biofuel crops, tree trunks and stumps.
 
Sébastien Godinot, economist at WWF European Policy Office said:
“This is a thorough and mostly science-based set of proposed criteria, which would rightfully put an end to polluting fossil fuels,  nuclear and bioenergy being greenwashed. Further work is now needed from the Commission to tighten up criteria on bioenergy, forest management and on  hydropower, given the damage dams do to fish and freshwater ecosystems.”
 
See WWF’s overview of how ten priority areas fare in the final TEG report, below. These are areas which were identified by WWF and other NGOs for the TEG interim report in September 2019. 
 
The EU Commission is presenting this report to the public on Thursday 12 March, then it will begin assessing the technical taxonomy criteria, based on the TEG’s proposal. The Commission is due to publish the final climate rules for the taxonomy before the end of 2020.
 
More information:

WWF preliminary analysis of the TEG final taxonomy report on ten priority issues: seven areas to improve, three to support
 
WWF strongly welcomes the TEG call for a complementary brown taxonomy.
 
Seven areas to improve

Economic activities for which the criteria need to be tightened 

1. Bioenergy manufacture and its use for heat and power

WWF welcomes the fact that the TEG criteria for manufacture of bioenergy have been improved, by making clear that the criteria in the Renewable Energy Directive are not science-based and completely inadequate, and by instead taking an approach based on feedstock. They are still not strict enough however and should be tightened further to exclude tree trunks and stumps and purpose grown biofuel crops.
 
        2.   Biofuels and biogas for transport

There are types of biofuels permitted in the transport sector that are not allowed in the heat and power sectors and that will typically increase emissions compared to fossil fuels – so-called ‘low-ILUC biofuels’. Fossil-based biofuels are also allowed. These criteria should be harmonised with the criteria on the manufacture of bioenergy.

3. Hydropower

WWF believes that the TEG criteria should be tightened for hydropower within the EU, where the already existing 20.000+ dams are disrupting freshwater ecosystems and cheaper, low carbon, low impact and viable alternatives exist. Greenfield hydropower plants should therefore not be developed in Europe anymore, refocusing on retrofits. Outside Europe the EU stringent standards should be followed and the emission threshold of 100 gCO2/KWh decreased.

4. Forestry

One of the main concerns is the lack of action to protect natural forests against deforestation. Afforestation or reforestation of forests is insufficient to replace forests lost to deforestation. Protecting, restoring and enriching biodiversity should therefore be an underlying requirement.
 
      5.   Cross-cutting ‘do no significant harm’ criteria on biodiversity

WWF raised initial concerns about the interim TEG taxonomy report, that have been adequately addressed by the TEG: it mainstreamed the ‘do no significant harm’ minimum requirement for most economic activities that they should not harm protected areas like UNESCO World Heritage Sites and Key Biodiversity Areas. But the Do no significant harm criteria for infrastructure still need to be improved further.
 
Economic activities to remove from the EU sustainable taxonomy

6. Vehicles and vessels that can burn fossil fuels

It is impossible to monitor whether a vehicle has only used biogas or biofuels. The thresholds should therefore be improved to ensure that vehicles and vessels that can burn fossil fuel (including gas) are removed from the EU taxonomy.

       7. Livestock

It is challenging to robustly assess greenhouse gas emission from livestock, hence intensive livestock activities should be excluded from the EU taxonomy for the time being, to explore the issue in a deeper way. Organic livestock could be an exception.

Three areas to support

Economic activities that were rightly excluded

8. Nuclear power

Nuclear power is rightly excluded by the TEG as it significantly harms the taxonomy’s pollution objective.

9. Fossil fuels (including gas)

Fossil fuels clearly operate on emissions that are far beyond the 100 gCO2/kWh threshold identified by the TEG. They are therefore rightly excluded from the taxonomy.

10. Incineration / waste to energy

The TEG has rightly excluded incineration as it undermines upper-tier activities of the waste hierarchy which are more protective of the climate.
 
What is the EU taxonomy?

It is a system which aims to select some economic activities as environmentally sustainable. 
 If it works properly, the EU taxonomy will help determine the sustainability of all activities and stop financial players falsely labelling unsustainable investments as climate-friendly. For example, the taxonomy is expected not to include gas power and nuclear power. The taxonomy’s classification should inform public and private investment decisions, and it is a new powerful tool  to make the EU economy environmentally and socially sustainable.
 
The taxonomy will also serve as the basis for other EU projects, such as the EU Ecolabel, which shows which products and services are green. Therefore, it is crucial that the technical criteria are built in a rigorous, science-based way that respects our environmental targets and planetary boundaries.
 
The report by the European Commission's ‘Technical Expert Group’ - which WWF was part of - contains suggested criteria for the EU taxonomy.  
 
Statement signed by over 50 NGOs on the ten priority areas for the taxonomy (September 2019)
  
Contact:
Sébastien Godinot
Economist, WWF European Policy Office
+32 489 46 13 14
sgodinot@wwf.eu
 
Sarah Azau
Media Manager, WWF European Policy Office
+32 473 57 31 37
sazau@wwf.eu