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The European Commission is divided on whether to postpone a decision on the classification of gas generated from fossil fuels as green energy under its benchmark rating system for investors.
Brussels planned to publish an updated draft of a taxonomy for sustainable financing later this week. The document is designed to target those who want to direct their money to environmentally friendly investments and help eliminate the misreporting of companies ’environmental impact, known as greenwashing.
The commission was forced to renew its initial proposals earlier this year after member states criticized the text that they want gas to be explicitly recognized as a low-emission technology that can help the EU achieve its goal. goal of becoming a clean pollutant by 2050.
Now the publication of the draft rules could be postponed again as the commission wants to resolve the impasse. According to a draft of the text seen by the Financial Times, the commission proposed delaying the decision to make an independent assessment of how gas and nuclear “contribute to decarbonisation” to allow for a more “transparent” debate on technologies.
But officials told the FT that some commissioners were pushing for the gas to receive the green label now, instead of delaying the decision until later this year.
“There are a considerable number of voices in the commission who want gas to be included in the taxonomy,” an official said. A final decision on whether to approve the current text or delay it again for a new wording is likely to be made on Monday.
The EU taxonomy is being closely monitored by investors as the first major attempt by a leading regulatory body to create a labeling scheme that will help invest billions of euros in green financial products.
But the process has proved divisive, as several EU governments have demanded recognition of lower-emission energy sources such as gas.
Coal-dependent countries, such as Poland, Hungary, Romania and others that use gas to help reduce their emissions, do not want the labeling system to discriminate against them. Meanwhile, France and the Czech Republic are also pushing for the recognition of nuclear as a “transitional” technology in taxonomy.
A filtered legal text seen by the FT earlier this month paved the way for the gas to be considered green in some limited circumstances. This has been removed along with other delicate issues, such as the best way to classify the agricultural sector, according to the latest draft seen by the FT.
EU governments and the European Parliament have the power to block the draft if they can gather a qualified majority of countries and MEPs against it.
Environmental groups have hailed the exercise and urged Brussels to follow science-based criteria to set the thresholds for sustainable economic activity.
Luca Bonaccorsi, of the NGO Transport and Environment, said delaying decisions on nuclear risk and gas would allow pro-nuclear countries such as France and the Czech Republic to join pro-gas member states “for to forge an alliance that obtains the greening and inclusion of both energy sources ”.
“If they ally, it will be impossible to resist the ecological washing of these two unsustainable energy sources,” Bonaccorsi said.
Delays in the taxonomy agreement have forced Brussels to abandon its attempt to use it as a basis for EU green bonds to be issued as part of the bloc’s recovery and resilience fund. 800 billion euros. Over the next few years, some 250 billion euros of debt will be issued in the form of sustainable bonds, making the commission one of the largest issuers of sustainable debt in the world.
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