Brussels sued for including fossil gas in EU’s green finance taxonomy

Pictured: Gas-fired power generation in southern Germany. Image: RWE

In a controversial move earlier this year, the European Commission gave gas power plants a ‘sustainable’ label under the EU’s green finance taxonomy, provided the technology meets a certain CO2 emissions threshold.

But environmental groups argue the legislation, which survived a European Parliament vote on 6 July, clashes with the European Climate Law and does not respect the EU’s obligations under the Paris Agreement.

“Gas is a potent fossil fuel that threatens European energy security and has led to sky-high energy prices across Europe,” argue the four NGOs – ClientEarth, WWF’s European Policy Office, Transport & Environment (T&E), and BUND (Friends of the Earth Germany).

According to the group, the label risks channelling more money into fossil gas power plants, and steer away investments from greener technologies like renewable energies and demand reduction.

“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 fundamental aims of achieving cleaner, cheaper and more secure energy,” said a spokesperson for the four environmental groups.

The lawsuit was made possible after a landmark reform of EU access to justice laws was adopted last year, throwing the courtroom doors open to a new wave of climate litigations.

The European Commission now has up to 22 weeks to reply before the EU Court of Justice is asked to rule on the matter and potentially repeal the controversial EU law – called a Delegated Act – which formally included gas into the EU’s green finance taxonomy.

The move signals a radicalisation of environmental groups on the EU’s green finance agenda.

On Wednesday (14 September) five NGOs decided to resign from a European Commission-led expert group on sustainable finance, saying the EU executive has interfered politically in decisions such as the inclusion of gas and nuclear in the taxonomy.

According to them, the credibility of the taxonomy has been undermined by the interests of governments and lobbies and has now become “a tool to promote greenwashing”.

Some EU countries have also announced they would take legal action against the Delegated Act. Austria, Luxembourg, and Spain have all said they would challenge the legislation in court after the European Parliament failed to gather a majority to oppose it.

Biomass in the spotlight 

While fossil gas and nuclear energy have been the focus for most of the attention on the EU’s green finance taxonomy, NGOs are now also taking legal action against another controversial source of energy – biomass. 

Last Friday (16 September), environmental groups filed a separate lawsuit against the European Commission for including forest biomass in the EU’s green finance taxonomy. They argue that the taxonomy greenlights “green” investment in forest management practices that are already degrading forests and should be stopped. 

The action is being brought by a team of lawyers and NGOs including the Forest Litigation Collaborative (FLC), a collaboration between the Lifescape Project and the Partnership for Policy Integrity, Save Estonia’s Forests, Clean Air Committee (Netherlands), and Protect the Forest (Sweden).

An additional 50 NGOs signed an open letter to the European Commission, declaring their support to the legal move.

Valentina Romano, EurActiv.com

This article first appeared on EurActiv.com, an edie content partner