Following the inclusion of nuclear and gas in the EU’s Sustainable Taxonomy, NGOs are now warning that the EU’s updated finance rules will greenlight projects that increase climate warming and destroy forests.
- A group of NGOs have filed legal action against the EU for the inclusion of the use of forest biomass under the Sustainable Taxonomy.
- The legal action confirms concern that the EU is basing taxonomy inclusion on future technological or scientific improvement, ignores today’s reality.
- If accepted, the action could suggest that, as is, decisions could be seen as violating primary EU law and the intent and legal requirements of the Taxonomy adopted by the EU Parliament.
A group of NGOs from across the EU have filed an annulment action seeking to block the recent approval of the inclusion of forest bioenergy and forestry projects. They argue that, under the Sustainable Finance Taxonomy, the Taxonomy’s standards will encourage projects that contribute to climate warming and forest degradation.
Clementine Baldon of Baldon Advocats, a convener and co-author of the legal challenge, said, “By classifying polluting and destructive activities as sustainable, the Commission is directing so-called ‘sustainable investment’ towards activities causing immense environmental harm. We are therefore asking the Court to annul the Commission’s refusal to review its decision to label these activities as sustainable.”
What is the EU’s Sustainable Taxonomy?
The Taxonomy, which has been widely criticised for including nuclear and natural gas as sustainable investments, also includes projects that accelerate logging and burning forest wood despite their substantial impact on ecosystems and the climate.
The “Taxonomy” is a classification system adopted by the European Parliament in Jun 2020 that purports to identify “sustainable projects and activities” (see the EC’s description here). In other words, it’s a way of labelling investments or industrial activities as “green” and responsive to environmental and social concerns.
For an economic activity to make it into the Taxonomy, it should make a significant contribution to at least one of the Taxonomy’s environmental objectives while doing no significant harm to any of the remaining objectives. The environmental objectives include climate change mitigation, climate change adaptation and biodiversity.
Although voluntary, the standards set by the Taxonomy will have a profound impact on private investment, the flow of trillions of dollars in capital, and resource extraction. It will therefore have a real world impact on communities, ecosystems, and the climate.
Why are forestry NGO’s against the inclusion of forestry biomass?
The case argues that the qualifying criteria for forestry and bioenergy projects violate basic legal obligations under primary EU law as well as key obligations under the Taxonomy Regulation because they are not based in scientific evidence, they fail to mitigate climate change, and they cause significant harm to the environment.
The argument is that directing financial investment toward burning wood and cutting down forests is not sustainable. Forest bioenergy, particularly industrial scale biomass, creates huge amounts of climate pollution and harms human health and wellbeing.
Burning wood for power also places a great demand on forest habitats and natural ecosystems: it draws on them as fuel. This reduces biodiversity and diminishes the ability of trees to remove carbon from the atmosphere.
“The European Commission has failed to provide any scientific basis for the forest and bioenergy criteria, putting forests and the climate at risk,” said Elsie Blackshaw-Crosby of the Lifescape Project, which provided legal support for the case. “The Taxonomy criteria are not simply wrong, they are unlawful, and we are asking the court to strike them down.”
Recent EU decision ignores NGO warnings
The annulment action follows a February 2022 Request for Review by the NGOs which requested the European Commission reconsider and revise its criteria for forest biomass and forestry projects. The European Commission declined the opportunity to review, prompting the filing of the legal case.
The NGOs are taking legal action because, they say, the criteria set by the Delegated Act are unscientific, vague and fail to satisfy the requirements of the Taxonomy to follow conclusive scientific evidence when determining which activities are included and the criteria they need to satisfy.
The science clearly shows that burning trees and other forest biomass for energy, and business as usual forest management, are damaging the climate and biodiversity. Evenglobal though the EC’s own scientists acknowledge this, the EC has chosen to ignore this evidence by including these activities in the Taxonomy.
The environmental law organisation ClientEarth is also filing a similar case challenging the Taxonomy’s bioenergy criteria, as well as one on criteria for organic chemicals.
NGOs have been highly critical of the EU’s classification of burning forest biomass as renewable energy as driving forest destruction and increased CO2 emissions, and a campaign advocating for disqualifying energy from forest biomass under the EU’s Renewable Energy Directive (RED) has been endorsed by more than 110 NGOs.
Augustyn Mikos of NGO Association Workshop for All Beings said: “Investments which ultimately support burning trees are not green and should not be labelled as green. In Poland we have seen a 150-fold increase in the use of use woody biomass for energy production in the last 15 years. Further incentives to support these activities pose a great threat to our forests, air quality and climate.”
Which NGOs are involved and what will happen next
Peter Lockley and Ben Mitchell of 11KBW led on writing the forestry section. The Forest Litigation Collaborative(FLC), a collaboration between the Lifescape Project and the Partnership for Policy Integrity, supported with scientific and legal input. The NGO complainants were Save Estonia’s Forests, ROBIN WOOD (Germany), Clean Air Committee (Netherlands), Workshop for All Beings (Poland), ZERO (Portugal), 2Celsius (Romania), and Protect the Forest (Sweden). An additional 50 NGOs signed an open letter to the EC declaring their support for the review and challenge.
The action was filed on 15th September 2022. They expect to receive the Commission’s defense within 2-3 months and then there may be an oral hearing of the case. Judgment is usually received within 1.5 to 2 years from filing.