Legal challenges to the inclusion of nuclear and natural gas in the EU green taxonomy

On 15 July 2022, the EU Taxonomy Complementary Climate Delegated Act covering certain nuclear and gas activities was published in the Official Journal of the EU (OJEU) (following no objection by the European Parliament and Council). It came into force on 4 August 2022 and shall apply from 1 January 2023. For more information on the Delegated Act, see our previous blog post: EU Taxonomy: Commission publishes final Delegated Act with technical screening criteria for nuclear power and natural gas.

However, a number of NGOs (including Greenpeace, ClientEarth, Friends of the Earth and the WWF) have asked the Commission to review the inclusion of natural gas and nuclear in the Delegated Act (see here and here). The NGOs argue that inclusion of these economic activities in the EU green taxonomy is in breach of the Taxonomy Regulation (they argue the inclusion is contrary to scientific evidence and the recommendations of the Platform on Sustainable Finance who are the Commission’s technical advisors on taxonomy), as well as the EU Climate Law and the EU’s obligations under the Paris Agreement. According to a spokesperson for ClientEarth and several other NGOs: “The Taxonomy is supposed to be the gold standard for investments but, as it stands, this Taxonomy Act sends all the wrong signals to investors. It needs to be repealed.”

The Commission has up to 22 weeks to reply to the NGOs’ requests. If, following an internal legal review, the Commission decides not to repeal/withdraw the Delegated Act, the NGOs have threatened to commence legal proceedings in the Court of Justice of the European Union (CJEU).

It is also possible that two member states, Austria and/or Luxembourg, might also commence legal proceedings against the Commission for inclusion of nuclear energy in the taxonomy. According to the Financial Times (see here), the member states could start legal action this month.

Previous requests from other NGOs asking the Commission to carry out an internal review of the inclusion of certain forestry and bioenergy activities in the EU green taxonomy had already been rejected by the Commission earlier this year. Some of those NGOs have now commenced legal proceedings in the CJEU (see here and here).

It remains to be seen whether the various requests for internal review and the legal challenges in the CJEU will result in any changes to the EU green taxonomy. In the meantime, the Complementary Delegated Act is due to apply from 1 January 2023.