On November 21, 2023, the European Commission’s Environmental Delegated Act was published in the European Union’s (EU’s) Official Journal. The act establishes technical screening criteria (TSC) for economic activities that make a substantial contribution to one or more of the nonclimate environmental objectives of the EU Taxonomy Regulation. The four nonclimate-related objectives are sustainable use and protection of water and marine resources; transition to a circular economy; pollution prevention and control; and protection and restoration of biodiversity and ecosystems. The delegated act will apply from January 1, 2024.
In addition, the European Commission amended the Climate Delegated Act, which establishes the TSC for economic activities that contribute substantially to climate change mitigation and climate change adaptation. The amendment makes some adjustments to the current TSC and expands the scope of the covered sectors, adding, for example, the manufacturing of automotive and mobility components for zero-emission personal mobility devices.
Delegated acts are nonlegislative acts adopted by the European Commission that amend or supplement the nonessential elements of a basic legislative act. (Treaty on the Functioning of the European Union (TFEU) art. 290.)
Background on the EU Taxonomy Regulation
The EU Taxonomy Regulation entered into force on July 12, 2020. It creates a classification system for environmentally sustainable economic activities (“green list”) and improves transparency by amending the disclosure requirements for companies. The list of sustainable economic activities is dynamic. The EU Taxonomy Regulation tasks the European Commission with adopting delegated acts to establish TSC for each environmental objective to determine the conditions for inclusion of activities on the green list and whether an economic activity significantly harms an environmental objective.
To be included on the green list, an activity must contribute substantially to at least one of the six environmental objectives set out in article 9 of the EU Taxonomy Regulation, not significantly harm any other environmental objectives, be carried out in compliance with minimum safeguards, and comply with the TSC set up by the European Commission in delegated acts. (EU Taxonomy Regulation art. 3.) The EU Taxonomy Regulation covers six environmental objectives, namely two climate-related objectives (climate change mitigation and climate change adaption) and four nonclimate-related objectives. (Art. 9.) Activities are divided into environmentally sustainable, transitional, and enabling activities. (Art. 3; art. 10, para. 2; art. 16.)
To date, the European Commission has published four delegated acts, namely the Disclosures Delegated Act, the Climate Delegated Act, the Complementary Climate Delegated Act on Nuclear and Gas, and the just-published Environmental Delegated Act.
Jenny Gesley, Law Library of Congress
January 3, 2024
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