• The changes label new fossil fuel planes and ships as “sustainable” if they meet weak efficiency criteria (i.e. they produce slightly less CO2).

• The NGOs argue that these criteria are contrary to the requirements of the Taxonomy Regulation, as they are not based on conclusive science, do not support a 1.5°C pathway, and will hamper the development of low-carbon alternatives in these sectors.

• The NGOs formally requested the EU Commission to review the criteria in January 2024, but the Commission has refused. The NGOs are now taking the Commission to the European Court of Justice.

A coalition of NGOs, backed by 35,000 concerned citizens, are taking the EU Commission to court over the decision to include polluting fossil fuel planes and ships in the EU’s flagship sustainable finance legislation, the EU Taxonomy. The coalition consists of Dryade, Fossielvrij NL, and Protect our Winters Austria, supported by legal experts Opportunity Green and CLAW.

The EU Taxonomy should act as the ‘gold standard’ for informing ethical and sustainable investments. It exists to provide a verified list of ‘green’ investments to companies, investors and policymakers, with a view to directing huge amounts of private finance to activities that deliver a fair, green transition.

At the end of 2023, the EU Commission added aviation and shipping criteria to the EU Taxonomy, a move which allows ships and planes running entirely on fossil fuels to be eligible for green finance if they meet certain weak ‘efficiency’ criteria. In January 2024, the five NGOs launched a legal challenge, requesting the EU Commission to review the criteria; a challenge which was subsequently rejected by the EU Commission in June 2024. Now, the NGOs are filing a case in the European Court of Justice which aims to force the Commission to review the criteria.

As it stands, under the shipping criteria, enormous cruise ships which run on LNG would be deemed ‘green’. However, these ships not only produce CO2 but leak huge amounts of methane into our atmosphere, a greenhouse gas which is 80 times more potent than CO2 in the short term (IPCC, page 87).

The aviation criteria are so weak that 100% of Ryanair, easyJet and Wizz Air’s order books, and 90% of Airbus’ upcoming deliveries, could be labelled ‘green’, according to analysis by Transport & Environment. Not only are these marginal improvements in CO2 efficiency incompatible with a 1.5°C pathway, they also don’t take into account the non-CO2 impacts of flights. Nor has the Commission properly considered low-carbon alternatives to flying, such as high-speed rail.

The EU Taxonomy Regulation requires conclusive scientific evidence to prove that sustainable activities are consistent with a 1.5°C pathway. However, whilst the latest scientific studies warn of rapidly rising methane emissions and the exhaustion of aviation’s carbon budget by as early as 2032, the Commission is actively incentivising investment in ships and planes that fly in the face of this evidence. Given the expected lifespans of planes and ships range from 20-50 years, such investments will pollute our land, sea and air for decades to come, and risk making a credible 1.5°C pathway to decarbonise these sectors impossible.

David Kay, Legal Director at Opportunity Green says:

“The Taxonomy is set to mobilise billions of Euros of private finance. But the aviation and shipping criteria send completely the wrong signal to investors – directing investments to planes and ships that will pollute the climate for decades to come. How are investors supposed to have confidence that their investments are truly green? We believe the criteria are unlawful and the EU Commission needs to be held to account.”

Hiske Arts at Dutch NGO Fossielvrij said:

“While judges and regulators are finally stepping up against the relentless greenwashing in the aviation and cruising sectors, the EU is taking greenwashing to the next level. By rubber-stamping extremely polluting planes and cruise ships as green, and thereby driving investments into an already growing fossil-powered industry, the EU has chained us to climate catastrophe. This needs to be stopped.”

Florian Graber from CLAW – Initiative for Climate Justice said:

“If aviation and shipping are misclassified as green,  we could be setting a dangerous precedent that fuels the very future we’re striving to prevent. The Taxonomy is meant to be built on conclusive science not a cut and paste job from industry. This is why the lawsuit is crucial – it’s about ensuring our investments align with our climate goals and what the science tells us we need to do to meet them.”

Elias Van Marcke of Dryade said:

“The EU Taxonomy should give investors clear, unequivocal recommendations about green investments. By allowing shipping and aviation to be included in the Taxonomy based on these flawed criteria, the Commission completely misses the ball. These criteria have been made to fit the industry, rather than driving investment towards green activities. This is unacceptable and completely undermines the credibility of the Taxonomy.”

The NGOs filed their case on 27 August 2024. They are represented by Fred Logue of FP Logue Solicitors and Tim Johnston (counsel at the Law Library in Ireland and Brick Court Chambers in London), with support and input from Odette Chalaby (No5 Chambers), Esther Drabkin-Reiter (Francis Taylor Building), and Margherita Cornaglia (Doughty Street Chambers).

Source: Opportunity Green