In late March 2021 a new draft proposal was circulating, which made some concessions to the points raised against the first draft. Most notably, gas-fuelled plants would qualify as sustainable if they replace a carbon-intensive plant by 2025, and cause a 50% reduction in carbon per kWh of energy generated.
Nonetheless, dissatisfied Member States announced their opposition to the new draft, with environmental groups warning that concessions to fossil fuel would open the door to greenwashing. The criteria used to define sustainable activities in agriculture and forestry also remained controversial.
Last week, the Commission published the finalised Delegated Act for the Taxonomy. The Act will be formally adopted at the end of May and enter into force in January 2022. To avoid further obstructions, the Commission has decided to remove the most controversial stipulations relating to nuclear and gas energy generation, and the agricultural sector. These will be covered in a complementary Delegated Act to be delivered later this year, following another review of the criteria by expert groups.
The most contentious aspects of the criteria, which relate to sustainable acquisition and operation of assets built before 2020, have been streamlined. Such assets constitute a large part of the real estate market and, as such, many vested interests are at play. Regional differences add a further layer of complication. The final version introduces a relaxation of criteria by comparison with previous Commission drafts. The overarching requirement is that all buildings achieve EPC A-rating. However, buildings failing to make that grade will be considered compliant if it can be demonstrated that they are in the top 15% of local buildings for energy performance. This qualification was designed to recognise that most European markets boast only a negligible number of A-rated buildings. In some member states – Italy and Spain, for instance – the total number of A and B-rated buildings combined would probably account for less than 15% of overall stock. However, in some markets, A-rated buildings alone account for much more than 15% of the whole. As such, while EPC ratings are useful, well-established instruments, they do not yet provide a fair means of establishing performance thresholds across the bloc.