Environmental coalition sues the European Commission over inclusion of biomass and forestry activities in EU Sustainable Finance Taxonomy

Environmental coalition sues the European Commission over inclusion of biomass and forestry activities in EU Sustainable Finance Taxonomy

NGOs say finance rules will greenlight projects that increase climate warming and destroy forests

As part of its Forest Litigation Collaborative work with PFPI, Lifescape has supported a group of NGOs from across the EU to file an annulment action against the European Commission which seeks to block forest bioenergy and forestry projects from inclusion under the Sustainable Finance Taxonomy. The NGOs argues that the Taxonomy’s standards will encourage projects that contribute to climate warming and forest degradation. The case was filed just days after a vote in the EU Parliament also signalled new reservations about burning trees and other forest biomass for “renewable” energy.

Clementine Baldon of Baldon Advocats, a convener and co-author of the legal challenge, said, “By classifying polluting and destructive activities as sustainable, the Commission is directing so-called ‘sustainable investment’ towards activities causing immense environmental harm. We are therefore asking the Court to annul the Commission’s refusal to review its decision to label these activities as sustainable.”

The Taxonomy, which has been widely criticised for including nuclear and natural gas as sustainable investments, also includes projects that accelerate logging and burning forest wood despite their substantial impact on ecosystems and the climate. The case argues that the qualifying criteria for forestry and bioenergy projects violate basic legal obligations under primary EU law as well as key obligations under the Taxonomy Regulation because they are not based in scientific evidence, they fail to mitigate climate change, and they cause significant harm to the environment.

“The European Commission has failed to provide any scientific basis for the forest and bioenergy criteria, putting forests and the climate at risk,” said Elsie Blackshaw-Crosby of the Lifescape Project, which provided legal support for the case. “The Taxonomy criteria are not simply wrong, they are unlawful, and we are asking the court to strike them down.”

The annulment action follows a February 2022 Request for Review by the NGOs which requested the European Commission reconsider and revise its criteria for forest biomass and forestry projects. The European Commission declined the opportunity to review, prompting the filing of the legal case. The environmental law organisation ClientEarth is also filing a similar case challenging the Taxonomy’s bioenergy criteria, as well as one on criteria for organic chemicals.

Recent reporting from the New York Times has highlighted illegal logging for forest biomass fuels in some of the EU’s last ancient forests. NGOs have been highly critical of the EU’s classification of burning forest biomass as renewable energy as driving forest destruction and increased CO2 emissions, and a campaign advocating for disqualifying energy from forest biomass under the EU’s Renewable Energy Directive (RED) has been endorsed by more than 110 NGOs.

The Taxonomy standards for bioenergy projects are essentially the same as the criteria under the RED that have triggered calls for reform, even by the European Commission. A vote on the RED taken by the EU Parliament on Wednesday 14 September, the day before the Taxonomy case was filed, signals that policymakers are considering constraining the use of forest biomass for renewable energy, though the final decision on the policy will not be taken until December.

Fenna Swart of Dutch NGO Clean Air Committee said, “Cutting and burning forests is not a solution to the Paris climate reduction targets, and we cannot allow continued investment in these activities to be called ‘renewable’ or ‘sustainable’. People in the Netherlands and around the world will pay dearly if the European Commission’s taxonomy is not stopped.”

“From drought to forest fires to dirty air, we are already seeing the devastating impacts of climate change,” said Nuno Forner, Policy Officer at ZERO (Portugal). “Europe’s climate solutions must not worsen these crises by greenwashing polluting and unsustainable activities, which is exactly what the Taxonomy is currently doing.”

Augustyn Mikos of NGO Association Workshop for All Beings said: “Investments which ultimately support burning trees are not green and should not be labelled as green. In Poland we have seen a 150-fold increase in the use of use woody biomass for energy production in the last 15 years. Further incentives to support these activities pose a great threat to our forests, air quality and climate.”

“The fact that it takes a long time for trees and intact forest ecosystems to grow, but that a tree can be burned extremely quickly, seems to be constantly suppressed by profit-seeking companies. The increasing demand for forest bioenergy is destroying our most important natural carbon sinks which help us to mitigate the extreme weather conditions of climate change and are a source of biodiversity. Politicians have allowed themselves to be lulled into this myth and urgently need to rectify their mistakes,” says Jana Ballenthien, ROBIN WOOD Forest Campaigner.

The case was led by Clementine Baldon of Baldon Advocats, who also led on writing the bioenergy section. Peter Lockley and Ben Mitchell of 11KBW led on writing the forestry section. The Forest Litigation Collaborative(FLC), a collaboration between the Lifescape Project and the Partnership for Policy Integrity, supported with scientific and legal input. The NGO complainants were Save Estonia’s Forests, ROBIN WOOD (Germany), Clean Air Committee (Netherlands), Workshop for All Beings (Poland), ZERO (Portugal), 2Celsius (Romania), and Protect the Forest (Sweden). An additional 50 NGOs signed an open letter to the EC declaring their support for the review and challenge.

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