Four environmental groups are officially starting legal action against the European executive to stop the EU including fossil gas in its sustainable finance rulebook.
- Concern is increasing over the damaging activities that are still supported under the EU Sustainable Taxonomy, including gas, nuclear and biomass for energy.
- Litigation against governments on climate issues is gaining traction, with over half the 80 outstanding cases being filed in 2021 alone.
- As litigation against governments and regions increase, there will be a knock-on effect on investors and corporates.
ClientEarth, WWF’s European Policy Office, Transport & Environment (T&E), and BUND (Friends of the Earth Germany) are starting legal action to prevent fossil gas from featuring in the EU’s sustainable finance Taxonomy.
While many groups are also concerned about the inclusion of nuclear in the Complemetnary Delegated Act (CDA), ClientEarth has says the action is focused on fossil-derived gas, as it lacks the technical expertise to take on nuclear as well.
Why are these NGOs taking the EU to court?
The Taxonomy’s Complementary Delegated Act (CDA), adopted controversially before the summer, gives gas a ‘sustainable’ label. The groups argue the CDA clashes with other EU laws, in particular the Taxonomy Regulation itself and the European Climate Law. It also does not respect the EU’s obligations under the Paris Agreement.
Gas is responsible for sky-high energy bills across Europe. In fact, a recent analysis from the ECB showed that the price of gas is responsible for 50% of inflation in the last year. Reduction in demand and growth in domestic renewables would help to cut costs and build energy security.
Gas also has detrimental impacts on the environment – including the release of vast amounts of carbon and methane emissions. By labelling it as ‘sustainable’ not only does the EU encourage damaging dependence on the fuel but continues support for an energy solution which exacerbates the climate challenge.
The challenge of continued gas use
Gas extraction and transportation not only emits huge amounts of CO2, it is also a big emitter of potent and poisonous greenhouse gas methane, which is 86 times more powerful than carbon dioxide in terms of climate change over 20 years.
Methane is emitted through the drilling and extraction of gas from wells and its transit through pipelines. Beyond climate, methane also has devastating impacts on human health – via air pollution – and ecosystems.
Both the IEA and the IPCC have clearly said no new oil and gas extraction projects should be commenced if we are to keep warming within 1.5C. Additionally, a recent study found that nearly half of existing fossil fuel production sites need to be shut down early if 1.5C is to be achieved.
How they are able to take the EU to court?
The groups have been able to commence legal action through a request for internal review – a mechanism now open for use by NGOs and the public after a major reform of EU access to justice laws in 2021.
In 2021, a landmark reform of EU access to justice laws was approved. This has lifted the main barriers preventing NGOs and people from challenging environmental wrongdoings in court.
Environmental NGOs now have the right to ask EU institutions and bodies – in this case the European Commission – to review one of their own decisions for contravening EU law related to the environment.
The Commission must officially reply to such a request within 16 weeks, a deadline that can be extended up to 22 weeks. If the claimants find that the Commission’s reply does not fix the legal violation, the claimants can sue the Commission in the Court of Justice of the European Union.
The groups are requesting that the EU Commission repeal the Complementary Delegated Act. The European Commission now has up to 22 weeks to reply. If the Commission refuses, the groups will be able to ask the Court of Justice of the EU to rule. The desired end result could be a judgement that forces the Commission to repeal the Complementary Delegated Act.