ForTheDoers Blog

Essential improvements are needed in EU taxonomy prior to approval

Anne Malorie Geron  ·  20 April 2021

The EU Commission is expected to adopt the criteria for the taxonomy governing sustainable financing within the European union on Wednesday 21 April. There has been active public debate on the delegated act, and companies as well as member states and voices within the Commission have expressed concerns and reservations regarding the upcoming proposal.

One of the primary issues brought up is the treatment of different technologies. The Commission is considering detaching nuclear power and gas from the taxonomy altogether, despite studies carried out by the Commission’s own research centre showing that nuclear power is no more harmful to the environment than other forms of CO2 free power production. Leaving these forms of production out of the taxonomy would create immense uncertainty in the market as no other governing framework exists to complement it.

Existing hydropower is also expected to be put in a disadvantaged position in the Commission’s proposal, as the criteria set for it is more stringent than that concerning wind and solar power. The decarbonisation of the Nordic countries relies on nuclear and hydropower and would be certain to face difficulties should these technologies be treated in a discriminatory way in EU legislation.

Another key issue with the taxonomy is that the Commission seems to be overstepping its mandate. A comitology procedure such as this delegated act should not go beyond existing legislation but only supplement or amend non-essential parts of EU legislation. By pushing legislation that does not fulfil the criteria of delegated acts and ignoring the technology neutrality principle, the Commission is putting at risk its own credibility as well as that of the European democratic process.

To sum up, there are three key concerns regarding the taxonomy:

  • The technology neutrality principle, which should be the basis for EU level regulation of sustainable energy production
  • The rule of law and the Commission’s credibility when it comes to building trust on the implementation of the EU Green Deal
  • Compliance with EU legislation, which should underlie all climate measures

To ensure that these concerns are properly addressed and all power technologies impartially assessed, Fortum would like to see more time given to the entire process.

Anne Malorie Geron

Anne Malorie Géron

VP, EU Affairs
Tel: +32 47 865 2801
anne-malorie.geron@fortum.com

Fact box: What is a delegated act in the EU's decision making?

The Commission adopts delegated acts on the basis of a delegation granted in the text of an EU law, in this case a legislative act.

The Commission's power to adopt delegated acts is subject to strict limits:

  • the delegated act cannot change the essential elements of the law
  • the legislative act must define the objectives, content, scope and duration of the delegation of power
  • Parliament and Council may revoke the delegation or express objections to the delegated act

Source: European Commission

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