The World Wide Fund for Nature (WWF) and several other non-governmental organisations (NGOs) have decided to cease their participation in the European Commission's (EC, Commission) Platform on Sustainable Finance, in protest against what they consider weak and “unscientific” bioenergy and forestry criteria in the EU green finance taxonomy.
The global conservation group announced the move on the evening of Wednesday, 21 April, hours after the Commission unveiled a new set of rules detailing the criteria that companies must meet to obtain the EU’s green investment label.
“With this move, the WWF is protesting against both the watering down of forestry and bioenergy criteria in the climate taxonomy and the process that led to these criteria,” the WWF stated.
Other “green” NGOs that decided to leave the platform include Transport & Environment (T&E), BirdLife, the European consumer organisation BEUC, and ECOS, an environmental group that promotes green product standards.
The summary of the European Commission’s Green Taxonomy rules presented on Wednesday introduces an investment labelling system that could channel hundreds of billions of euros towards sectors and companies that obtain the “sustainable” label for all or part of their operations.
This applies to 13 sectors, including renewable energy, transport, forestry, manufacturing, buildings, insurance, and even the arts, which together account for almost 80% of EU greenhouse gas emissions, the Commission stated.
EU sets criteria for environmentally friendly investments in new “taxonomy” rules
On 21 April, the European Commission presented its first set of implementing rules under the EU Taxonomy for Sustainable Finance, setting out detailed technical criteria that companies must follow to obtain the green investment label in Europe.
Environmental advocates argue that the taxonomy’s forestry criteria are too weak because they classify industrial logging, as well as the burning of wood and crops for energy, as “sustainable” investments.
“The Commission’s final taxonomy document on forestry and bioenergy does not acknowledge the environmental problems we are facing. The content of the document has been significantly influenced by the unbalanced lobbying of Finland and Sweden - it contradicts environmental science, discredits the taxonomy and sets a disastrous precedent,” stated Sébastien Godinot (Sebastien Godinot), economist at the WWF European Policy Office.
The EU consumer organisation BEUC has indicated that following the Commission’s decision to include forestry and bioenergy in the first set of taxonomy rules, the EU taxonomy “risks becoming little more than a greenwashing tool”.
Last month, the WWF, along with other so-called environmental activist groups and scientists, sent an open letter to the EU executive expressing concern over what they called “unscientific criteria” in the Commission’s proposal.
“If politics and lobbying dominate over science, it is our duty to inform you that we will be forced to reconsider our contribution to the platform,” the activist group wrote in a letter dated 31 March.
Sandrine Dixson-Declève (Sandrine Dixson-Declève), President of the Club of Rome and one of the advisers on the group, told EURACTIV that she is also considering similar action.
“I have informed the Commission that I will resign if significant changes are not made,” she said in emailed comments to EURACTIV. “I have been saying since early December that the process is no longer science-based,” she added, expressing concern that the taxonomy is too politicised.
“The current act is a political deal. It is not as bad as it could have been, but in some areas, it is an accidental ‘last-minute political trade-off’ rather than scientific and technical evidence. I am still very worried about this. If the platform conducts two years of excruciating analysis and you get that result, it is a waste of my time and expertise,” she said.
Taxonomy rules must be “politically acceptable,” the EU admits
The European Commission stated that it is “aware of the NGOs’ concerns” and is committed to reflecting on improving the process for developing and setting technical screening criteria.
However, the EU executive defended the proposal presented on Wednesday, saying it is the “best possible set of legislation at present,” given the political sensitivities surrounding nuclear energy, gas, and other energy technologies.
The criteria indicated in the taxonomy rules “must be science-based, usable, and politically acceptable,” said Commission financial services spokesperson Daniel Ferrie (Daniel Ferrie). “The Commission’s duty is to ensure a balance between these objectives while maintaining confidence in the criteria,” he pointed out in comments sent via email to EURACTIV.
It is not just environmentalists who are concerned about forestry and bioenergy
Member of the European Parliament Pascal Canfin (Pascal Canfin), who chairs the European Parliament’s Environment Committee, said he understands the NGOs’ concerns. “The NGOs are fundamentally right: the taxonomy proposals are insufficient in terms of forest protection,” he explained in an interview with EURACTIV before the presentation of the Commission’s final proposal.
However, P. Canfin refrained from blaming the European Commission. According to him, the taxonomy’s forestry criteria are the result of “enormous” pressure from Sweden and Finland, which rely heavily on biomass for their energy consumption and have been demanding weaker rules.
“The Commission’s reasoning is pragmatic - it must avoid being blocked by a minority” in the Council of Ministers, where it is already facing opposition from eastern EU member states regarding natural gas, said Canfin.
“It is worrying,” he continued, “that in both Finland and Sweden, the ruling coalitions are formed by the Green and Social Democratic parties.
So we arrive at the rather confusing conclusion that it is precisely the Social Democrats and the Greens in Finland and Sweden who are weakening the taxonomy. Well done!”
EU taxonomy draft does not affect bioenergy and forestry
EURACTIV has learned that the European Commission has decided not to include agriculture but has kept the controversial bioenergy and forestry criteria in its first set of proposed implementing rules.
Platform “will continue its work,” states the EU Commission
On 21 April, EU Commissioner for Financial Services Mairead McGuinness (Mairead McGuiness) insisted that the taxonomy is a “living document” that “will evolve with science and technology”. Updates to the forestry and bioenergy rules will be made when changes to the Renewable Energy Directive, which is scheduled for revision in the second half of this year, are implemented.
M. McGuinness defended the political compromises reached in the proposal. “The basis of the taxonomy must be science-based, but you cannot separate science from the real world and real concerns,” she said, referring to the disagreements over gas, nuclear energy, and forestry. “And that is how it should be so that we can develop the best possible mechanism, and the European Union would not only lead this mechanism but do so in an understandable and credible way,” she said.
The European Commission, in communication with EURACTIV, continues to avoid comments on the consequences of the NGOs leaving the Platform on Sustainable Finance. It is not yet clear whether new members will be invited to join the group or if it will simply continue its work without them.
“The work of the platform will continue without changing the planned outcomes,” said EU Commission financial services spokesperson Daniel Ferrie.
The advisory group brings together representatives from the private and public sectors, including industry, academia, civil society, and the financial sector. According to the EU executive, it “plays a key role” in reaching a consensus on green finance by “combining the best expertise in the field of sustainability,” which comes from these different disciplines.
The chair of the group, Nathan Fabian (Nathan Fabian), stated that the platform “will now continue its important work,” supporting the Commission’s green finance work programme. In comments published on Twitter, he indicated that the platform “has a full programme of measures planned” with new proposals to extend the taxonomy to new categories of ecological indicators.