Expert consultations on Taxonomy Complementary Delegated Act

On 31 December 2021 the European Commission began consultations on a draft text of the Taxonomy Complementary Delegated Act covering certain gas and nuclear activities with the Member States Expert Group on Sustainable Finance and the Platform on Sustainable Finance.

The EU Taxonomy created common criteria for determining whether a project or an economic activity is environmentally sustainable for the purposes of establishing the degree to which an investment is environmentally sustainable. This is a science-based legal transparency tool for companies and investors. On the other hand, the EU Taxonomy introduced disclosure obligations for financial market participants and issuers in respect of financial products or corporate bonds that are made available as environmentally sustainable.

The European Commission considers that natural gas and nuclear has a role to facilitate the transition towards a predominantly renewable-based future. As a consequence, the Taxonomy framework should classify these energy sources, in particular as they contribute to the transition to climate neutrality, but only under clear and tight conditions. Accordingly, the European Commission will amend the Taxonomy Disclosure Delegated Act so that investors can identify whether activities cover gas or nuclear activities, and if yes, to what extent. The criteria for the gas and nuclear activities will be updated in line with the technological development.

The European Commission has analysed the result of the consultation with the Platform on Sustainable Finance and the Member States Expert Group on Sustainable Finance, and formally adopts the complementary Delegated Act in January 2022. Then it will be sent to the European Parliament and the Council, which have 4 months to scrutinise the document. If the scrutiny period is over and there is no objection, the Delegated Act will enter into force and apply.