NEW ANALYSIS FROM CLIENTEARTH warns that including gas in the EU green labelling system is “unlawful”. In a letter to the European Commission, they call on EU authorities to categorically exclude gas activities from the EU Taxonomy.
Announced in April 2021, the EU Taxonomy sets the rules for what counts as an environmentally sustainable economic activity. It covers 40 per cent of the EU economy and affects businesses beyond Europe. A decision on whether gas activities will be included in the EU Taxonomy – and therefore considered a green investment – is expected this autumn.
Gas threatens to derail the EU’s climate efforts. In the process of extracting, transporting, and distributing gas, methane – its main component – leaks into the atmosphere in colossal quantities. Methane is a powerful greenhouse gas with a global warming potential 86 times that of carbon dioxide over a 20-year period. It is therefore vital gas is not embraced as a ‘lighter’ alternative to coal.
ClientEarth lawyer Marta Toporek said: “Gas is a fossil fuel – classifying it as environmentally sustainable is not only absurd, it’s also unlawful. The European Union cannot keep its climate promises and give gas a free pass at the same time.”
In its letter to the Commission, ClientEarth argues that including gas in the Taxonomy would clash with other EU laws, in particular:
- The EU’s obligations under the Paris Agreement;
- EU climate laws including the recently adopted European Climate Law with its commitment to a climate-neutral Europe by 2050 and a minimum 55 per cent CO2 reduction by 2030;
- The Treaty on the Functioning of the European Union, which requires the EU to “pursue a high degree of environmental protection and international cooperation to combat climate change”;
- The Taxonomy Regulation itself because gas activities do not meet the definition of “climate change mitigation”, one of the Taxonomy’s categories, and they do not comply with EU Taxonomy requirements for “transition” measures.
The EU taxonomy also aims to stamp out greenwashing in the finance sector, by stopping financial players from falsely labelling unsustainable investments as green.
Toporek added: “Labelling gas as sustainable is misleading and only encourages further greenwashing by industry players. This decision would increase investment in gas and divert investment away from genuinely green alternatives.
“After a summer of climate chaos causing ever-more severe flooding, fires and droughts, it’s clear that fossil fuels should have no future in Europe’s energy system.”
The inclusion of certain gas activities in the EU Taxonomy would be done through an additional Delegated Act on climate taxonomy – a non-legislative but binding act. When the Commission adopts such a Delegated Act, the European Parliament and the Council will have a chance to weigh in during a four-month scrutiny period – which can be extended by two months. During this period, they may decide to accept or reject this Delegated Act.
* Read the letter to the Commission here.
* Source: ClientEarth