- The amendments label new aircraft and ships powered by fossil fuels as “sustainable” if they meet weak efficiency criteria (i.e. they produce slightly less CO2).
- The NGOs argue that these criteria are in violation of the requirements of the Taxonomy Regulation, as they are not based on conclusive science, do not support a 1.5°C pathway, and hinder the development of low-carbon alternatives in these sectors.
- The NGOs formally requested the European Commission to review the criteria in January 2024, but the Commission has refused. The NGOs are now taking the case to the European Court of Justice.
A coalition of NGOs, supported by 35,000 concerned citizens, is suing the European Commission over the decision to include polluting aircraft and ships powered by fossil fuels in the European legislation for sustainable finance, the EU taxonomy. The coalition consists of Dryade, Fossil Free NL, and Protect Our Winters Austria, with support from legal experts Opportunity Green and CLAW.
The EU taxonomy should serve as the ‘gold standard’ for informing ethical and sustainable investments. The aim is to provide a verified list of ‘green’ investments to companies, investors, and policymakers, with a view to directing large amounts of private financing towards activities that ensure a fair, green transition.
At the end of 2023, the European Commission added aviation and shipping criteria to the EU taxonomy, allowing ships and aircraft that are fully powered by fossil fuels to qualify for green financing if they meet certain substandard 'efficiency' criteria. In January 2024, five NGOs challenged this decision, asking the European Commission to review the criteria; this request for review was rejected by the Commission in June 2024. The NGOs are now bringing a case before the European Court of Justice to compel the Commission to revise the criteria.
At present, under the shipping criteria, enormous cruise ships powered by LNG would be classified as 'green'. However, these ships not only produce CO2 but also leak large amounts of methane into the atmosphere, a greenhouse gas that is 80 times more potent than CO2 in the short term (IPCC, page 87).
The aviation criteria are so weak that 100% of the order books of Ryanair, easyJet, and Wizz Air, and 90% of the upcoming deliveries from Airbus, could be classified as 'green', according to analysis by Transport & Environment. These marginal improvements in CO2 efficiency are incompatible with a 1.5°C pathway and do not take into account the non-CO2 effects of flights. The Commission has also failed to consider low-carbon alternatives to flying, such as high-speed trains.
The EU taxonomy regulation requires conclusive scientific evidence to demonstrate that sustainable activities are consistent with a 1.5°C pathway. While the latest scientific studies warn of rapidly rising methane emissions and the depletion of the aviation carbon budget as early as 2032, the Commission is actively promoting investments in ships and aircraft that ignore this science. Given the expected lifespan of aircraft and ships between 20 and 50 years, such investments will pollute our earth, sea, and air for decades to come, making it nearly impossible to follow a credible 1.5°C pathway to decarbonise these sectors.
David Kay, legal director at Opportunity Green, says:
“The taxonomy is intended to mobilise billions of euros in private financing. But the aviation and shipping criteria send completely the wrong signal to investors – they direct investments towards aircraft and ships that will maintain climate pollution for decades to come. How can investors have confidence that their investments are truly green? We believe that the criteria are unlawful and that the European Commission must be held accountable.”
Hiske Arts from the Dutch NGO Fossielvrij states:
“While judges and regulators are finally taking action against the ruthless greenwashing in the aviation and cruise industry, the EU is taking greenwashing to a new level. By labelling extremely polluting aircraft and cruise ships as green and thus stimulating investments in an already growing fossil industry, the EU has shackled us to a climate catastrophe. This must be stopped.”
Florian Graber from CLAW – Initiative for Climate Justice, believes:
“If aviation and shipping are misclassified as green, we could set a dangerous precedent that fuels the future we are trying to prevent. The taxonomy must be based on sound science and not on a cut-and-paste job from the industry. That is why this lawsuit is crucial – it is about ensuring our investments align with our climate goals and what science tells us we must do to achieve those goals.”
Elias Van Marcke from Dryade says:
“The EU taxonomy must provide investors with clear, unambiguous recommendations on green investments. By including shipping and aviation in the taxonomy based on these flawed criteria, the Commission is completely missing the mark. These criteria are tailored to the industry, rather than directing investments 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).