The adoption of the Taxonomy Regulation is an important step towards mobilising investments for low-carbon technologies. To build on this, the EU should develop the technical screening criteria in a way that is mindful of the individual needs of different sectors as well as the specific characteristics of all Member States, and formulate its benchmarks in an inclusive and technology-neutral manner.
FuelsEurope has been involved in the Taxonomy Regulation from the very beginning by deeply analysing all its aspects and by offering collaboration with the EU institutions, Member States, and stakeholders, to help create the essential enabling policy framework in this field.
To continue giving our support, we recently applied to be part of the upcoming Platform on Sustainable Finance.
We would welcome that the EU technical screening criteria are being developed in a way that is mindful of the individual needs of different sectors as well as the specific characteristics of all Member States. The benchmarks should be developed in a way that broadens the basket of technological climate solutions, rather than narrows it. Particularly, low-carbon liquids have an important role to play as one such climate solution and more broadly in the energy transition of the EU economy.
The future Taxonomy should adopt a transitional, evidence-based and pragmatic approach, which reflects today’s technological development, available renewable and highly efficient low-carbon solutions significantly contributing to the transition, as well as current energy mixes and existing infrastructure.
When drafting the taxonomy’s technical screening criteria, the classifications should be based on the potential of investment projects, and not on generic classes of projects, so to avoid a-priori judging certain asset classes or entire sectors as “non-sustainable”. A holistic approach looking at all solutions that contribute to meeting the EU energy, environmental, climate and circular economy goals is required to ensure a neutral approach and a level-playing field.
The criteria in the regulation should be flexible enough to adapt to the market needs, to consider the different levels of possible contribution to the GHG reduction process and to take into account the scalability of a given technology, its potential multiple application, its applicability of learnings to other projects and cross-sectoral spill-overs.
The classifications should be based on a Life Cycle Analysis, ensuring a holistic approach on the impact of various technologies on the global climate.
The taxonomy should facilitate the availability of funds for sustainable research projects in a long-term perspective. Only a broad coalition of industry experts and financial institutions will be able to deliver workable solutions, creating a nurturing research environment, in view of the implementation of HorizonEurope.
The future Taxonomy’s criteria and thresholds should be impact assessed prior to their application, to avoid unintended consequences for the sectors in which they will apply.
The refining industry’s Vision 2050 shows which low-carbon fuels and products technologies are being developed and how significantly they can contribute to meeting the EU GHG emissions targets. We invite the Commission and the Sustainable Finance Platform stakeholders to take these into consideration.
It is only through a thoroughly transparent, inclusive and facts-driven process that the taxonomy will be able to deliver its climate objectives, and be designed fully fit-for-purpose.