A coalition of non-governmental organisations (NGOs) is taking the EU Commission to court for its decision to categorise fossil fuel-powered planes and ships as sustainable under the EU Taxonomy, calling it “greenwashing at the highest level”. The legal action is spearheaded by Dryade, Fossielvrij NL, and Protect Our Winters Austria, with expert support from Opportunity Green and CLAW.

The EU Taxonomy, designed to serve as the benchmark for ethical and sustainable investments, a ‘gold standard’, aims to provide a verified list of ‘green’ investments for companies and policymakers, with a view to directing huge amounts of private finance to activities that deliver a fair, green transition.

However, Opportunity Green, a UK charity established in 2021 with a focus on harnessing legal, economic, and policy solutions to address climate change, said that at the end of 2023 the EU Commission added aviation and shipping criteria to the EU Taxonomy, allowing ships and planes running on fossil fuels to be eligible for green finance if they meet, what the NGOs described as “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.

The NGOs argue that the current shipping criteria could classify large LNG-powered cruise ships as ‘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),” Opportunity Green said.

“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.”

“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,” David Kay, Legal Director at Opportunity Green said.

“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,” Elias Van Marcke of Dryade said.

The NGOs filed their case on 27 August 2024.

A coalition of non-governmental organisations (NGOs) is taking the EU Commission to court for its decision to categorise fossil fuel-powered planes and ships as sustainable under the EU Taxonomy, calling it “greenwashing at the highest level”. The legal action is spearheaded by Dryade, Fossielvrij NL, and Protect Our Winters Austria, with expert support from Opportunity Green and CLAW.

The EU Taxonomy, designed to serve as the benchmark for ethical and sustainable investments, a ‘gold standard’, aims to provide a verified list of ‘green’ investments for companies and policymakers, with a view to directing huge amounts of private finance to activities that deliver a fair, green transition.

However, Opportunity Green, a UK charity established in 2021 with a focus on harnessing legal, economic, and policy solutions to address climate change, said that at the end of 2023 the EU Commission added aviation and shipping criteria to the EU Taxonomy, allowing ships and planes running on fossil fuels to be eligible for green finance if they meet, what the NGOs described as “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.

The NGOs argue that the current shipping criteria could classify large LNG-powered cruise ships as ‘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),” Opportunity Green said.

“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.”

“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,” David Kay, Legal Director at Opportunity Green said.

“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,” Elias Van Marcke of Dryade said.

The NGOs filed their case on 27 August 2024.