EXCLUSIVE Lawyers warn EU against labeling gas as a ‘green’ investment

Storage tanks are seen in an (LNG) facility at Waterston, Milford Haven, Pembrokeshire, Wales, Great Britain September 20, 2021. REUTERS / Rebecca Naden / File Photo

  • ClientEarth says move would violate multiple EU laws
  • Brussels decision on gas in “taxonomy” expected this year

BRUSSELS, Oct. 7 (Reuters) – Environmental law firm ClientEarth has warned the European Union that it will be violating its own laws if it calls investments in gas-fired energy in gas stations “green”. forthcoming financial regulations.

In a letter to the bloc’s executive on Wednesday seen by Reuters, ClientEarth said classifying gas as environmentally friendly would violate other laws, including the EU’s legally binding goal of reducing its net emissions. of greenhouse gases by at least 55% by 2030 compared to 1990 levels, and bring to zero by 2050.

The EU is about to complete the climate part of its taxonomy of sustainable finance, a one-of-a-kind regulation that aims to divert private capital from polluting economic activities to those the EU deems environmentally friendly.

The European Commission is expected to make a decision in the coming months on whether the climate taxonomy, most of which has proposed rules for the start of this year, will label natural gas and nuclear power as green investments.

“If adopted, it would likely increase investment in activities using natural gas and be in total contradiction with commitments made by the European Commission at international and European level,” ClientEarth said in the letter.

A European Commission official said he received the letter and responded “on time”.

ClientEarth said legislation that supported gas financing would divert funds that could otherwise be spent on renewables. The taxonomy would not prevent investors from investing money in gas projects, but it would prohibit them from labeling such investments as sustainable.

The lawyers added that the gas also does not meet a key element of the taxonomy regulation, which states that to be considered climate-friendly, investments must “contribute substantially to the stabilization of greenhouse gas emissions. greenhouse to a level that prevents dangerous anthropogenic climate change “.

While gas is not as polluting as coal, it still produces carbon emissions when burned and is linked to powerful methane emissions, which must be quickly reduced to meet the Paris climate targets.

However, some EU countries see gas as a transitional fuel and say it should be included in the taxonomy to support investments that would help them phase out coal-fired energy.

The disagreement fueled extensive lobbying from governments and forced the Commission to delay its gas decision for almost a year.

Tensions have escalated further in recent weeks as European gas prices hit record highs, prompting some countries to call for an earlier shift away from fossil fuels to reduce exposure to volatile prices.

Reporting by Kate Abnett and Simon Jessop; Editing by Aurora Ellis

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