EU to define what makes a ‘green’ investment in transport, industry, buildings: draft

FILE PHOTO: An electric vehicle charging station is seen on a motorway service station near Dresden
FILE PHOTO: An Ionity electric vehicle charging station is pictured on the motorway service station "Dresdner Tor Sued" near Dresden, Germany, August 27, 2019. REUTERS/Annegret Hilse/File Photo

April 16, 2021

By Kate Abnett

BRUSSELS (Reuters) – The European Union will next week lay out conditions that transport, industry and buildings must meet to be classed as a sustainable investment in Europe, but delay a decision on whether to label gas and nuclear power as green, according to a draft document seen by Reuters.

The EU’s “sustainable finance taxonomy” is a long list of economic activities and the rules they must meet to be labelled as sustainable investments in the EU from next year.

The landmark regulation aims to make green activities more visible and attractive to investors, and ensure that a sustainable investment label is only given to economic activities that comply with EU targets to slash greenhouse gas emissions.

A draft of the rules, seen by Reuters and due to be published on April 21, omits natural gas. EU countries are split over whether gas-fuelled power plants should be deemed green, and the Commission plans to address the fuel, along with nuclear power, in a separate proposal later this year.

The draft rules include detailed definitions of what will count as a sustainable investment in other sectors, including transport, energy generation from sources including wind and hydropower, building renovations, and manufacturing of cement, steel and batteries.

For example, cement plants must have emissions below 0.72 tonnes of CO2 equivalent per tonne of grey clinker produced.

Meanwhile, car manufacturing can be labelled as a sustainable investment until the end of 2025 if the vehicles emit less than 50g of CO2 per km. After that date, only the manufacture of zero-emission cars will be deemed green.

The Commission declined to comment on the draft document, which is subject to change before publication.

By cutting out gas and nuclear, the Commission aims to win EU countries’ approval for the rules. But the sectors of forestry and bioenergy have also proved contentious, with nine of the Commission’s expert advisers threatening to resign over its proposals for those sectors and gas, which they said would discredit Europe’s climate policies.

To earn a sustainable label, an activity must make substantial contribution to one of six environmental aims and not impede the other five. The draft rules cover two of those six aims – fighting climate change, and adapting to its impacts.

(Reporting by Kate Abnett; Editing by Kirsten Donovan)