Overturning the vote at Committee level, the plenary of the European Parliament has endorsed the EU Commission Taxonomy Complementary Delegated Act. Due to votes from conservatives, a slight majority of MEPs supported the controversial Commission proposal labelling gas and nuclear energy as sustainable and thus compliant with the taxonomy classification that serves as a key guide for investors.

The Socialists and Democrats Group has, on many occasions, vocally called on the Commission to revise its position. The proposed legislation fell short of the ambition to set the global ‘gold standard’ for sustainable finance. On the contrary, it marked a very negative setback in the EU’s efforts to align with the Paris Agreement.

S&D vice-president and shadow rapporteur in the environment committee, Simona Bonafè, said:

“The Taxonomy Complementary Delegated Act as approved today not only risks jeopardising the EU’s future energy system, but also misses the target of creating trust and transparency for investors.

“Including gas and nuclear among taxonomy-compliant economic activities remains the wrong political message, both from an environmental and economic prospective.

“We do recognise the importance of gas and nuclear to meet the energy needs required in the transition towards a climate neutral EU, however these are not the energy sources of the future.

“Despite this unfortunate setback, we will continue fighting in order to make the common good prevail and to make the EU’s actions consistent with reaching the Paris Agreement targets.” 

S&D shadow rapporteur in the economic affairs committee, Paul Tang, explained: 

“Today’s vote is a painful and shameful setback for Europe as a global leader in the fight against climate change. By endorsing the Commission’s plans to define gas and nuclear as sustainable, the EU is institutionalising greenwashing at an unprecedented scale. From a climate-leader, Europe risks becoming a climate-laggard, as even Russia’s taxonomy does not label gas as sustainable. Europe’s unscientific project should not be an invitation for countries around the world to lower their climate ambitions.

“This has been an extremely divisive episode in the EU’s efforts to build a more sustainable financial sector. It is now vital that the Commission provides a way forward that overcomes these divisions. We need a more inclusive strategy that doesn’t just focus on the green niche, but helps the entire economy transition - from polluting to neutral to green. The financial sector needs this, European investors need this and our planet needs this.

“I still strongly believe the Commission overstepped the mandate given to them by the Taxonomy Regulation. They have abandoned the principle of technological neutrality by giving gas preferential treatment and failed to follow their own standards of good policymaking by pushing these political decisions through the backdoor. Parliament cannot let the Commission violate its legislative power in this way and we will consult legal advice on how to proceed. Court cases are inevitable on this decision, meaning prolonged periods of uncertainty for financial markets.

“Fortunately, many financial players already announced that they will not follow the EU’s greenwashing approach and will continue to ban nuclear and gas from their portfolio. The transparency measures adopted today will ensure we can monitor this and call out those institutions selling fossil-gas investments as green. We call on all financial market participants to take their responsibility and do their part to achieve the goals of the Paris Agreement.”