Press release: 7 October 2021
Labelling gas as a green investment is “unlawful” – environmental lawyers
Environmental lawyers ClientEarth have released analysis warning that including gas in the EU green labelling system is “unlawful”. In a letter to the European Commission, they are calling 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% 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% 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.
Notes to editors:
Read ClientEarth’s letter to the European Commission here.
ClientEarth is a non-profit organisation that uses the law to create systemic change that protects the Earth for – and with – its inhabitants. We are tackling climate change, protecting nature and stopping pollution, with partners and citizens around the globe. We hold industry and governments to account, and defend everyone’s right to a healthy world. From our offices in Europe, Asia and the USA we shape, implement and enforce the law, to build a future for our planet in which people and nature can thrive together.