IVA provides feedback on recommendations for the EU taxonomy

The Royal Swedish Academy of Engineering Sciences (IVA) has provided the following general feedback on the preliminary recommendations for technical screening criteria for the EU taxonomy from the Platform on Sustainable Finance (PFS).
shutterstock_1930313816.jpg

The EU taxonomy is an innovative policy tool with great potential. However, in order to avoid sub-optimisation it needs to be implemented carefully and it is extremely important to secure a solid scientific foundation. Whereas IVA supports the ambitious biodiversity and climate goals, and believe it is critical that they are reached, we question many of the suggested screening criteria and believe they may in several cases even be counterproductive.

Process shortcomings

In our view the process underlying the proposed screening criteria is unsatisfactory.

  • The scientific basis is limited reflected in part by a narrow set of references (omitting other relevant research).
  • In general there is a lack of systems-/value chain perspectives leading e.g. to omission of positive substitution effects when establishing the criteria.
  • In many instances the criteria fail to take into account regional variations (i.e. assuming the conditions in different member states is identical) which is clearly a flawed perspective.
  • Furthermore, no consequence analyses have been made to assess the impact of different criteria from environmental, social and economic sustainability perspectives. In our view it would be irresponsible, and poor policy making, to introduce screening criteria without such assessments.

Democratic deficit

IVA is critical of how such comprehensive and far-reaching proposals concerning criteria for sustainable production in various industries have been developed. Regulations that may restrict activities to such an extent should be decided in politically open and transparent processes. The decision form "delegated act" should be used with great caution and only when it concerns smaller areas. The Swedish Parliament has, for example, decided on a climate law and the government has commissioned the inquiry Fossil-Free Sweden to investigate how these goals can be achieved in collaboration with various societal interests. In a review of the proposed taxonomy criteria, IVA sees that they involve a direct undermining of the funds allocated to achieve Swedish goals. This includes, but is not limited, to: metals needed for electrification; district heating and trigeneration (which have almost eliminated oil from heating homes); forest products to wooden houses, green chemistry, hygiene products, paper and second  third generation biofuels. Furthermore, as an additional example, the proposals go deep into forestry operations and the process industry in a way that can be questioned since forestry policy according to the Swedish Accession Treaty is not an EU competence. The principle of subsidiarity is not mentioned at all, despite its key role in the Founding Treaty.

Other considerations - Examples

To achieve the necessary climate goals, fossil-based products must be replaced. In Swedish industry, ambitious goals for research and innovation go hand in hand. This results in technological breakthroughs and new innovative products. The mining and steel industry has high sustainability goals and is now developing fossil-free steel and circularity. The automotive industry is switching to third-generation biofuels, hybrid vehicles and all-electric vehicles. The energy industry has almost completely phased out fossil fuels. The construction industry is developing new climate-neutral methods and increasing construction in wood. Packaging is evolving at a furious pace towards better climate values. Agriculture is changing production methods, technology and inputs. The forest industry is products already generates large negative emissions. Overall, substitution is one of the most important tools for achieving Sweden's and the EU's climate and sustainability goals. The Academy is therefore strongly critical of the fact that substitution effects are not explicitly taken into account.

Assuming that similar conditions apply in all member countries is problematic. This damages the credibility of both the European Commission and the PSF. The forest sector can be taken as an example. It is well known to many that eucalyptus in Portugal has a growth cycle of 8-9 years, while conifers in the Nordic countries require 80-120 years. An average time for carbon balance analyzes based on 30-year cycles throughout the EU and broken down for everyone who has 13 hectares of forest therefore becomes both illogical and almost impossible. In Sweden alone, there are 330,000 family foresters and the proposal therefore also entails an enormous bureaucracy.

Contact information

Elin Elliot
Head of International Affairs
Phone +46 8-791 29 28