EU executive is currently drafting a rulebook for sustainable finance, drawing up a complete set of criteria defining what can be considered as a “green” investment in the European Union. an essential part of plans to bring private finance onboard with Europe’s transition to a zero-carbon economy and prevent greenwashing from firms making false environmental claims. However, environmental groups have voiced concern that a leaked proposal to expand the remit of fossil gas in the taxonomy could in itself amount to greenwashing. Gas-fired power plant used specifically for maintaining the reliability of electricity supply by contributing to grid stability can be assumed to operate 2,000 hours per year or less. Gas plants which operate for less than 2,000 hours a year to fit into a “transition” category in the sustainable finance taxonomy because they would “guarantee the reliability of electricity supply” until their operating hours eventually fall down to zero by 2050.
Eurogas, a trade association, also refused to comment on the leak specifically but made a general comment backing the Commission’s proposed formulation. European Commission has taken an ambivalent stance on gas. While insisting that fossil gas must be cut to zero by 2050, EU climate chief Frans Timmermans said it will continue to play a key role to replace coal in power generation and build a hydrogen infrastructure at least cost. However, gas has so far remained outside the green finance taxonomy because of the carbon emissions associated with burning the fuel. That caused uproar among a group of ten EU member states, which threatened to veto the Commission’s green taxonomy rulebook, sending the EU executive back to the drawing board.