The European Commission has launched a 4-week consultation (5 April 2023 to 3 May 2023) on a draft delegated regulation (theTaxonomy Environmental Delegated Act) with technical screening criteria (TSC) for economic activities making a substantial contribution to the four remaining environmental objectives under the Taxonomy Regulation. Those are:
- the sustainable use and protection of water and marine resources (Article 1 and Annex I to the draft delegated regulation);
- the transition to a circular economy (Article 2 and Annex II to the draft delegated regulation);
- pollution prevention and control (Article 3 and Annex III to the draft delegated regulation); and
- the protection and restoration of biodiversity and ecosystems (Article 4 and Annex IV to the draft delegated regulation).
The draft Taxonomy Environmental Delegated Act also:
- sets out criteria for determining whether those economic activities cause significant harm to any of the other environmental objectives;
- prioritises economic activities and sectors that were identified as "having the biggest potential to make a substantial contribution to one or more of the above four environmental objectives and for which it was possible to develop or refine the recommended criteria without further delay". Further work will be needed on other sectors and activities (e.g. agriculture, forestry, fishing and certain manufacturing activities); and
- will amend the Taxonomy Disclosures Delegated Act to ensure that the disclosure requirements are consistent with Taxonomy Environmental Delegated Act, and to correct some technical errors.
As part of this 4-week consultation, changes are also being proposed to the Taxonomy Climate Delegated Act (by way of a separate delegated regulation to the above draft delegated act) to add TSC for economic activities not yet included in that Taxonomy Climate Delegated Act (largely dealing with manufacturing activities in relation to key components for low carbon transport and electrical equipment, and some transitional activities in the transport sector).
We will publish further insights as these delegated acts progress.
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.