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ClientEarth Communications

19 September 2022

EU
European Green Deal
Clean energy
Climate finance
Climate
Access to Justice

We’ve started legal action against the classification of gas as ‘sustainable’

Alongside our partners WWF’s European Policy Office, Transport & Environment (T&E), and BUND (Friends of the Earth Germany), we have officially started legal action against the European executive to stop the EU including fossil gas in its sustainable finance rulebook.

What is the EU taxonomy?

At this moment in our fight against climate change, the way money is allocated could be make or break. But how can we make sure that the money is directed towards climate-friendly projects, both targeting climate mitigation – such as renewable energy businesses – or working on adaption solutions in areas hit hardest by climate change? 

The EU Taxonomy was created to provide responses to these questions. It is a classification system, establishing technical criteria – for example the amount of CO2 emissions – for certain economic activities. When a listed economic activity complies with the taxonomy criteria it may be considered environmentally sustainable for investment purposes.

The Taxonomy aims to provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered ‘green’ in financial disclosures and reporting. 

Why the EU should not label ‘gas’ as sustainable 

Our reliance on gas has led to sky-high energy bills – leading to a surge in the number of households struggling to afford heat and electricity. 

Gas has also been used as a political chess piece by Russia.

It also has detrimental impacts on the environment – including the release of vast amounts of carbon and methane emissions. 

Labelling gas as ‘sustainable’ risks channelling investments into this harmful energy source, away from genuinely sustainable sources of energy like homegrown renewables – and skilfully reducing demand in the first place. 

Cleaner energy technology is here now, and already proving cheaper than dirty fossil fuels.

Our legal challenge

Alongside WWF EU, Transport & Environment, and BUND (Friends of the Earth Germany) we are starting legal action to prevent fossil gas from featuring in the EU’s sustainable finance Taxonomy.

The Taxonomy’s Complementary Delegated Act (CDA), adopted controversially before the summer, gives gas a ‘sustainable’ label. 

We argue the CDA clashes with other EU laws, in particular the Taxonomy Regulation itself and the European Climate Law. It also does not respect the EU’s obligations under the Paris Agreement.

A spokesperson for ClientEarth, WWF European Policy Office, T&E and BUND said: "Propping up gas, a fossil fuel which is currently at the centre of a cost of living crisis across the bloc, undermines the EU's aims of achieving cleaner, cheaper and more secure energy. To bring down people’s bills, secure energy supplies and protect citizens from climate chaos, the EU needs to stop greenwashing gas as ‘sustainable’ in the EU Taxonomy.

"The Taxonomy is supposed to be the gold standard for investments but, as it stands, this Taxonomy Act sends all the wrong signals to investors. It needs to be repealed."

We have been able to commence legal action through a request for internal review – a mechanism now open for use by NGOs and the public after a major reform of EU access to justice laws last year.

We request the EU Commission to repeal the Complementary Delegated Act. The European Commission now has up to 22 weeks to reply. If the Commission refuses, the organisations will be able to ask the Court of Justice of the EU to rule.

The desired end result could be a judgement that forces the Commission to repeal the Complementary Delegated Act.