eu taxonomy regulation text

For the purposes of this Regulation, the term ‘energy efficiency’ is used in a broad sense and should be construed by taking into account relevant Union law, including Regulation (EU) 2017/1369 of the European Parliament and of the Council (48) and Directives 2012/27/EU (49) and (EU) 2018/844 (50) of the European Parliament and of the Council, as well as the implementing measures adopted pursuant to Directive 2009/125/EC of the European Parliament and of the Council (51). One element of the uniform criteria should be to avoid significant harm to any of the environmental objectives set out in this Regulation. The technical screening criteria established pursuant to Articles 10(3), 11(3), 12(2), 13(2), 14(2) and 15(2) shall: identify the most relevant potential contributions to the given environmental objective while respecting the principle of technological neutrality, considering both the short- and long-term impact of a given economic activity; specify the minimum requirements that need to be met to avoid significant harm to any of the relevant environmental objectives, considering both the short- and long-term impact of a given economic activity; be quantitative and contain thresholds to the extent possible, and otherwise be qualitative; where appropriate, build upon Union labelling and certification schemes, Union methodologies for assessing environmental footprint, and Union statistical classification systems, and take into account any relevant existing Union legislation; where feasible, use sustainability indicators as referred to in Article 4(6) of Regulation (EU) 2019/2088; be based on conclusive scientific evidence and the precautionary principle enshrined in Article 191 TFEU; take into account the life cycle, including evidence from existing life-cycle assessments, by considering both the environmental impact of the economic activity itself and the environmental impact of the products and services provided by that economic activity, in particular by considering the production, use and end of life of those products and services; take into account the nature and the scale of the economic activity, including: whether it is an enabling activity as referred to in Article 16; or. The ESAs shall update the regulatory technical standards in the light of regulatory and technological developments. 5. Since the objectives of this Regulation cannot be sufficiently achieved by the Member States, but can rather, by reason of the need to introduce at Union level uniform criteria for environmentally sustainable economic activities, be better achieved at Union level, the Union may adopt measures, in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. Position of the European Parliament of 17 June 2020 (not yet published in the Official Journal). Such financial market participants and issuers include financial market participants that make available environmentally sustainable financial products and non-financial companies that issue environmentally sustainable corporate bonds. (31)  Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste (OJ L 182, 16.7.1999, p. 1). This document is an excerpt from the EUR-Lex website, Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Text with EEA relevance), OJ L 198, 22.6.2020, p. 13–43 (BG, ES, CS, DA, DE, ET, EL, EN, FR, GA, HR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV), ELI: http://data.europa.eu/eli/reg/2020/852/oj, REGULATION (EU) 2020/852 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL, on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088. Such enabling activities should not lead to a lock-in of assets that undermine long-term environmental goals, considering the economic lifetime of those assets, and should have a substantial positive environmental impact, on the basis of life-cycle considerations. (2)  Position of the European Parliament of 28 March 2019 (not yet published in the Official Journal) and Position of the Council at first reading of 15 April 2020 (OJ C 184, 3.6.2020, p. 1). On 22 June 2020, the long-awaited Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “EU Taxonomy Regulation”), and amending Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”) was published on the Official Journal of the European Union. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, such as through the Platform and the Member State Expert Group on Sustainable Finance, and that those consultations be conducted in accordance with the principles laid down in the Interinstitutional Agreement of 13 April 2016 on Better Law-Making (64). (34)  Commission Decision 2014/955/EU of 18 December 2014 amending Decision 2000/532/EC on the list of waste pursuant to Directive 2008/98/EC of the European Parliament and of the Council (OJ L 370, 30.12.2014, p. 44). The aim of the Regulation is to provide an EU-wide framework for classifying economic activity as environmentally sustainable (an overview of the Regulation can be found in our memo on the subject). The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities.’. In addition to the use of climate-neutral energy and more investments in already low-carbon economic activities and sectors, the transition requires substantial reductions in greenhouse gas emissions in other economic activities and sectors for which there are no technologically and economically feasible low-carbon alternatives. The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Prior to adopting the delegated act referred to in paragraph 3 of this Article, the Commission shall consult the Platform referred to in Article 20 regarding the technical screening criteria referred to in paragraph 3 of this Article. When developing the draft regulatory technical standards referred to in the first subparagraph of this paragraph, the ESAs shall take into account the various types of financial products, their characteristics and objectives and the differences between them and, where necessary, shall develop draft amendments to the regulatory technical standards referred to in paragraph 4 of this Article. Given the specific technical details needed to assess the environmental impact of an economic activity and the fast-changing nature of both science and technology, the criteria for environmentally sustainable economic activities should be adapted regularly to reflect such changes. It can also contribute substantially to the environmental objective of transitioning to a circular economy by developing ‘product-as-a-service’ business models and circular value chains, with the aim of keeping products, components and materials at their highest utility and value for as long as possible. The Platform should be composed of experts representing both the public and private sectors. Under the European Union (Withdrawal) Act 2018, the Taxonomy Regulation itself will form part of EU retained law after the end of the transition period. For the purposes of this Regulation, the following shall be environmental objectives: the sustainable use and protection of water and marine resources; the protection and restoration of biodiversity and ecosystems. The taxonomy is a classification framework according to which activities can be assessed in order to determine whether they are environmentally sustainable. in Article 20, paragraph 3 is replaced by the following: ‘3. The Platform shall carry out its tasks in accordance with the principle of transparency. Currently, a few Member States have labelling schemes in place. In that context, the technical screening criteria should promote appropriate governance frameworks integrating environmental, social and governance factors as referred to in the United Nations-supported Principles for Responsible Investment at all stages of a project’s life cycle. In its communication of 20 June 2019 on ‘Guidelines on non-financial reporting: Supplement on reporting climate-related information’, the Commission recommends that certain large companies report on certain climate-related key performance indicators (KPIs) that are based on the framework established by this Regulation. 3. When establishing and updating the technical screening criteria, the Commission should also take into account the specificities of the infrastructure sector and should take into account environmental, social and economic externalities within a cost-benefit analysis. Given the political commitments under the Paris Agreement and at Union level, it is likely that more and more Member States will establish labelling schemes or impose other requirements on financial market participants or issuers in respect of promoting financial products or corporate bonds as environmentally sustainable. The EU Taxonomy Regulation was published on 22 June 2020 and came into force on 12 July 2020. It will become law by means of a taxonomy regulation, the proposed text of which was agreed by the EC, the European Parliament and the EU Council in December 2019. Member States and the Union shall apply the criteria set out in Article 3 to determine whether an economic activity qualifies as environmentally sustainable for the purposes of any measure setting out requirements for financial market participants or issuers in respect of financial products or corporate bonds that are made available as environmentally sustainable. The Taxonomy Regulation entered into force 20 days after it was published in the Official Journal of the EU on 22 June 2020. In order to ensure consistency between this Regulation and Regulation (EU) 2019/2088, this Regulation should amend Regulation (EU) 2019/2088 to mandate the European Supervisory Authorities established by Regulations (EU) No 1093/2010 (52), (EU) No 1094/2010 (53) and (EU) No 1095/2010 (54) of the European Parliament and of the Council (collectively, the ‘ESAs’) to jointly develop regulatory technical standards to further specify the details of the content and presentation of the information in relation to the principle of ‘do no significant harm’. The Commission shall adopt the delegated act referred to in paragraph 3 by 31 December 2020, with a view to ensuring its application from 1 January 2022. In that context, it is crucial to remove obstacles to the efficient movement of capital into sustainable investments in the internal market and to prevent new obstacles from emerging. The Taxonomy Regulation leaves it to the delegated acts – to be based on the input of the stakeholders comprising the Platform for Sustainable Finance - to determine the role for nuclear energy and/or natural gas, if any, in the taxonomy. When assessing an economic activity against the criteria set out in paragraph 1, both the environmental impact of the activity itself and the environmental impact of the products and services provided by that activity throughout their life cycle shall be taken into account, in particular by considering the production, use and end of life of those products and services. Requirements for marketing financial products or corporate bonds as environmentally sustainable investments, including requirements set by Member States and the Union to allow financial market participants and issuers to use national labels, aim to enhance investor confidence and awareness of the environmental impact of those financial products or corporate bonds, to create visibility and to address concerns about ‘greenwashing’. 1. Substantial contribution to pollution prevention and control. (28)  Directive 2012/19/EU of the European Parliament and of the Council of 4 July 2012 on waste electrical and electronic equipment (WEEE) (OJ L 197, 24.7.2012, p. 38). Updated technical screening criteria for 70 climate change mitigation and 68 climate change adaptation activities, including criteria f… We are at a crucial time now to make this language work for collective action, and this needs us to focus on the detailed criteria and governance mechanisms that will unlock the much-needed resources. 2018/0178(COD) COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the. In December 2019, the European Council and the European Parliament reached political agreement on the text of a proposed Regulation on the Establishment of a Framework to Facilitate Sustainable Investment - the so-called "Taxonomy Regulation". 5. Those minimum safeguards are without prejudice to the application of more stringent requirements related to the environment, health, safety and social sustainability set out in Union law, where applicable. The Taxonomy Regulation imposes three key obligations:on member states and at EU … COM(2020) 155 final. As a new effort to reduce the critical environmental issues the world is facing, The European Commission formulated the EU Taxonomy Regulation . Brussels, 23.4.2020. (17)  Council Directive 98/83/EC of 3 November 1998 on the quality of water intended for human consumption (OJ L 330, 5.12.1998, p. 32). The Commission shall publish the minutes of the meetings of the Platform and other relevant documents on the Commission website. Financial market participants shall include in the information to be disclosed pursuant to Article 6(1) and (3) of this Regulation the information required under Article 5 of Regulation (EU) 2020/852.’; in paragraph 5, the first subparagraph is replaced by the following: ‘5. The resulting Directive will be implemented in future national-level regulations. (9)  Regulation (EU) No 1380/2013 of the European Parliament and of the Council of 11 December 2013 on the Common Fisheries Policy, amending Council Regulations (EC) No 1954/2003 and (EC) No 1224/2009 and repealing Council Regulations (EC) No 2371/2002 and (EC) No 639/2004 and Council Decision 2004/585/EC (OJ L 354, 28.12.2013, p. 22). To ensure that investments are channelled towards economic activities that make the greatest positive impact on the environmental objectives, the Commission should give priority to the establishment of technical screening criteria for the economic activities that potentially contribute most to the environmental objectives. An economic activity should qualify as contributing substantially to one or more of the environmental objectives set out in this Regulation where it directly enables other activities to make a substantial contribution to one or more of those objectives. When complying with those minimum safeguards, undertakings should adhere to the principle of ‘do no significant harm’ referred to in Regulation (EU) 2019/2088, and take into account the regulatory technical standards adopted pursuant to that Regulation that further specify that principle. does not lead to a lock-in of carbon-intensive assets, considering the economic lifetime of those assets. Some economic activities have a negative impact on the environment, and reducing such negative impact can make a substantial contribution to one or more environmental objectives. ​Scroll through these slides to access the personalised features of your Dashboard. Achieving the SDGs in the Union requires the channelling of capital flows towards sustainable investments. The Taxonomy Regulation establishes an EU-wide classification system or ‘framework’ intended to provide businesses and investors with a common language to identify to what degree economic activities can be considered environmentally sustainable. Having a deep understanding of our clients' industries and the challenges that they face is key to delivering excellent legal advice. (39)  Directive (EU) 2016/2284 of the European Parliament and of the Council of 14 December 2016 on the reduction of national emissions of certain atmospheric pollutants, amending Directive 2003/35/EC and repealing Directive 2001/81/EC (OJ L 344, 17.12.2016, p. 1). (49)  Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC(OJ L 315, 14.11.2012, p. 1). To give sufficient time to the relevant actors to familiarise themselves with the criteria for qualification as environmentally sustainable economic activities set out in this Regulation and to prepare for their application, the obligations set out in this Regulation should become applicable, for each environmental objective, 12 months after the relevant technical screening criteria have been established. A copy of the Council’s press release published on 18 December 2019 can be found here5. (47)  Directive (EU) 2018/2001 of the European Parliament and of the Council of 11 December 2018 on the promotion of the use of energy from renewable sources (OJ L 328, 21.12.2018, p. 82). the long-term disposal of waste may cause significant and long-term harm to the environment; pollution prevention and control, where that activity leads to a significant increase in the emissions of pollutants into air, water or land, as compared with the situation before the activity started; or. The potential capacity to contribute to those environmental objectives can vary across sectors, which should be reflected in those criteria. in paragraph 3, the first subparagraph is replaced by the following: ‘3. Taxonomy Regulation, Article 20 “Platform on Sustainable Finance”. The Taxonomy Regulation will establish an EU-wide classification system (or taxonomy) intended to provide firms and investors with a common framework for identifying to what degree economic activities can be considered to be "environmentally sustainable". The Commission shall adopt that delegated act by 1 June 2021. THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION. By way of derogation from paragraph 2 of this Article: Articles 4(6) and (7), 8(3), 9(5), 10(2), 11(4) and 13(2) shall apply from 29 December 2019; Articles 2a, 8(4), 9(6) and 11(5) shall apply from 12 July 2020; in respect of the environmental objectives referred to in points (a) and (b) of Article 9 of Regulation (EU) 2020/852, from 1 January 2022; and. By 31 December 2021, the Commission shall publish a report describing the provisions that would be required to extend the scope of this Regulation beyond environmentally sustainable economic activities and describing the provisions that would be required to cover: economic activities that do not have a significant impact on environmental sustainability and economic activities that significantly harm environmental sustainability, as well as a review of the appropriateness of specific disclosure requirements related to transitional and enabling activities; and. Substantial contribution to climate change mitigation. By 13 July 2022, and subsequently every three years thereafter, the Commission shall publish a report on the application of this Regulation. After today's vote and the signature of the text, the Taxonomy Regulation will be published in the Official Journal and enter into force in its entirety 20 days after its publication. The application of this Regulation should be reviewed regularly in order to assess, inter alia: the progress with regard to the development of technical screening criteria for environmentally sustainable economic activities; the possible need to revise and complement those criteria for determining whether an economic activity qualifies as environmentally sustainable; the effectiveness of the classification system for environmentally sustainable economic activities in channelling private investment into such activities and in particular as regards the flow of capital into private enterprises and other legal entities; and the further development of that classification system, including by expanding its scope beyond environmentally sustainable economic activities, in order to cover activities that significantly harm the environment, as well as other sustainability objectives, including social objectives. In particular, non-financial undertakings shall disclose the following: the proportion of their turnover derived from products or services associated with economic activities that qualify as environmentally sustainable under Articles 3 and 9; and. The Commission shall adopt a delegated act in accordance with Article 23 to supplement paragraphs 1 and 2 of this Article to specify the content and presentation of the information to be disclosed pursuant to those paragraphs, including the methodology to be used in order to comply with them, taking into account the specificities of both financial and non-financial undertakings and the technical screening criteria established pursuant to this Regulation. supplement Article 17 by establishing, for each relevant environmental objective, technical screening criteria for determining whether an economic activity in respect of which technical screening criteria have been established pursuant to point (a) of this paragraph causes significant harm to one or more of those objectives. The TR sets out the framework and environmental objectives for the Taxonomy, as well as new legal obligations for financial market participants, large companies, the EU … (59)  Directive 2001/42/EC of the European Parliament and of the Council of 27 June 2001 on the assessment of the effects of certain plans and programmes on the environment (OJ L 197, 21.7.2001, p. 30). The Commission should specify the information that needs to be disclosed in that regard. In its conclusions of 20 June 2017 the Council confirmed the commitment of the Union and its Member States to the implementation of the 2030 Agenda in a full, coherent, comprehensive, integrated and effective manner, in close cooperation with partners and other stakeholders. (36)  Directive 2004/107/EC of the European Parliament and of the Council of 15 December 2004 relating to arsenic, cadmium, mercury, nickel and polycyclic aromatic hydrocarbons in ambient air (OJ L 23, 26.1.2005, p. 3). See all EU institutions and bodies. 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