Saudi insurance sector eyes more mergers and acquisitions

BRUSSELS: The European Commission will next week present the first part of a list of the “green taxonomy” of energy sources and technologies to be labeled as sustainable investments. However, a question mark hangs over the inclusion of natural gas.

The classification system, due to be published on Wednesday, is required under an agreement between the Member States and the European Parliament of 2019 that aims to define lasting economic activities and environmentally friendly financing.

It wants to define what the EU would consider sustainable as it approaches the goal of Europe becoming climate neutral by 2050, with the criteria focusing on mitigating or preparing for climate change.

A second Commission proposal is due to follow later this year, covering four other issues – protecting water and marine resources, circular economy, pollution prevention and biodiversity – all of which are part of the EU’s Green Deal to achieve this goal to reach.

In order for an investment to be classified as “green”, it must achieve one of these goals without harming the others.

The proposal is intended to become a “delegated act”, ie it becomes law unless the Member States or the European Parliament reject it.

However, a leak in the Commission’s taxonomy list last month sparked an outcry from NGOs, experts and MPs, particularly over the inclusion of gas as a partially sustainable energy source.

Nine experts consulted by the Commission threatened to break off cooperation because of the perceived “greenwashing”, according to a letter sent to the Commission and viewed by AFP.

According to Leck, the Commission’s plan provides for gas-powered power plants to be marked as “green” by 2025 as transitional facilities in which they replace coal-fired power plants. One of the experts who signed the letter, Sebastien Godinot, an economist at the environmental NGO WWF, said it would give gas operators a “blank check” and risk long-term dependence on fossil fuels.

“This proposal could potentially create a direct incentive to build even more gas-cogeneration plants than planned,” warned Godinot.

Bas Eickhout, a Green MEP from the Netherlands, said: “A gas-fired power plant that has now been built should last for 40 years. That takes you well beyond the 2050 deadline. “

As a result, “we will object” to the Commission’s proposal, based on the version leaked in March, Eickhout said.

Several sources said the governments of Austria, Denmark, Ireland, Luxembourg and Spain wrote a joint letter to the Commission to raise their objection to the inclusion of gas in the taxonomy.

Godinot noted that while natural gas releases less carbon dioxide than coal, it also emits methane, which is viewed as a worse greenhouse gas emission.

Other points of discord are the Commission’s approach to forestry and logging, which some consider to be insufficiently rigorous, and bioenergy is automatically classified as sustainable even if the biomass it uses comes from specific farmland.

A French news website, Contexte, said Thursday that the commission was forced to revise its document and could go back to an ordinary legislative process that would take much longer.

The Commission has not confirmed this. An EU source said the text to be presented was “still under development” and stressed how technical it was.

“Right now we’re talking about a general approach to gas. More analysis is needed, ”the source said.

Comments are closed.