NGOs launch legal challenge against EU's bid to label fossil fuel planes and ships as green

Press Release

(16 January, 2024)

  • The European Commission is about to stick a green investment label on thousands of highly polluting planes and ships under changes to the EU Taxonomy for sustainable activities.

  • Under the Commission’s criteria, ships and planes running on fossil fuels could be eligible for green finance, if they meet certain weak ‘efficiency’ criteria.

  • 100% of Ryanair, easyJet and Wizz Air’s order books, and 90% of Airbus’ order books, could be considered best-in-class.

  • Enormous cruise ships such as MSC World Europa, which is equipped to run entirely on fossil fuels (LNG), would also be deemed sustainable under the Taxonomy rules.

Five NGOs – Fossielvrij, Protect our Winters, Dryade, CLAW and Opportunity Green – have launched a legal challenge against the European Commission, requesting it to review its green investment rules on aviation and shipping. This is the first step in the challenge which may lead to court action before the European Court of Justice if the Commission does not address the legal issues raised. 

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.

Under the new aviation criteria, planes that meet weak fuel efficiency standards, or are certified to fly on low levels of “sustainable aviation fuels”, may be taxonomy compliant – even though demand growth has historically always outstripped efficiency savings. Under the shipping criteria, LNG-powered ships could also be taxonomy compliant, despite LNG being a highly polluting fossil fuel which produces methane, a greenhouse gas which is 80 times more potent than CO2 in the short term. The NGOs argue that there is no robust scientific evidence for these new criteria, and that they potentially jeopardise climate mitigation efforts and the EU’s legally binding climate targets.

Given the expected lifespans of planes and ships range from 20-50 years, this means that the Taxonomy could drive investment to planes and ships that pollute the air and seas for decades to come, making a mockery of the urgent need to decarbonise all sectors.    

This challenge is the latest in a series of legal challenges that have been filed against the Commission for bringing fossil fuel-based activities into the Taxonomy under the claim of being ‘transition activities’.    

Hiske Arts at Dutch NGO Fossielvrij said: “The Taxonomy is flying under the radar for most people – but if we don’t challenge it these industries will be allowed to rubber stamp planes and ships powered by fossil fuels as sustainable. This would mean that money that is meant for climate solutions will end up fuelling climate disaster, as it encourages the polluting aviation and shipping industries to sustain their unsustainable growth path."

Moritz Nachtschatt at Protect Our Winters Austria said: “European airlines cannot be considered sustainable if they continue expanding the global fleet. The taxonomy rules could allow them to get green finance to upgrade their fleets, while selling their old planes to other airlines, meaning the global fleet size – and global aviation emissions – actually increase.”

Elias Van Marcke of Dryade said: “Allowing shipping and aviation to be included in the Taxonomy with these criteria waters down a classification system designed to give investors clear, unequivocal recommendations about green investments. Instead, the EU is sanctioning murky solutions that don’t support a green transition to net zero. It is crucial to remember that the taxonomy criteria must be compliant with the Paris Agreement's 1.5°C goal, a legal obligation we believe these criteria fall short of.”

The aviation and shipping industries have lobbied hard to get certain criteria recognised as ‘green’ in the EU Taxonomy. As a result, many future fleets will be compliant under the new Taxonomy because they replace older models, providing companies with a smokescreen whereby investment will continue to power dirty ships and planes.

Carly Hicks, Chief Strategy and Impact Officer & Legal Director at Opportunity Green said: “Big cruise ships powered with fossil gas could obtain a green label, despite the fact that these ships leak methane into our atmosphere, which has disastrous consequences for the climate. All sectors, and companies, must be held accountable for their part in reducing emissions, and the EU has a hugely important role in ensuring this. Instead, this decision risks driving huge amounts of finance towards highly polluting activities. It is the worst kind of greenwashing. If the Commission doesn‘t address the legal violations we believe we have identified, we will be forced to take action before the European Court of Justice.”

 

ENDS

 

Media contacts

Hannah Jolliffe

Communications Manager, Opportunity Green
hannah@opportunitygreen.org

Notes to editors

Carly Hicks
Chief Strategy & Impact Officer and Legal Director, Opportunity Green
carly@opportunitygreen.org

What is the Taxonomy and why does it matter?

The EU Sustainable Finance Taxonomy (often referred to as just ‘the Taxonomy’) is a classification system establishing which investments can be regarded as environmentally sustainable. It exists to provide a harmonised list of ‘green’ investments to companies, investors and policymakers, with the aim of directing investments to a fair, green transition. It is supposed to provide a gold standard in sustainability labelling, driving finance flows to green activities, giving investors confidence and addressing greenwashing. 

Since the adoption of the Taxonomy in 2020, the EU Commission has been using its delegated powers to add activities to the list. The supposed gold standard is increasingly being watered down, and things that cause significant carbon pollution like forestry bioenergy and fossil gas have been brought onto the list in recent years.

Its latest change, published in November 2023, has introduced aviation and shipping activities as potentially a sustainable investment if they meet, not very stringent, efficiency criteria.

The Taxonomy is meant to include only activities which are aligned with a 1.5°C pathway. The NGOs argue that the EU has ignored that by bringing in fossil fuel-burning planes and ships that pose a serious risk to the EU’s 2030 and 2050 climate goals.

What is the legal procedure used in this case?

The coalition of environmental NGOs is issuing a request for internal review to the European Commission under the Aarhus Regulation. This procedure allows NGOs to ask the Commission to review a decision if those NGOs consider it contravenes environmental law. The Commission will then consider the requested review and respond within 16 weeks (which can be extended to 22 weeks). If the Commission rejects the request for internal review, the applicants may institute proceedings before the Court of Justice of the European Union.

Who are the NGOs involved?

  • CLAW empowers a sustainable legal system against a tipping future and creates framework conditions for climate lawsuits.

  • Dryade uses the force of law to defend the interests of both nature and mankind.

  • Fossielvrij is a Dutch foundation that builds and supports the people-powered fossil free movement in the Netherlands. Their mission is to break the power of the fossil fuel industry to create space for a fast, just transition toward 100% renewable energy for all.

  • Opportunity Green is an environmental NGO that uses legal, economic and policy knowledge to tackle climate change.

  • Protect our Winters Austria helps passionate outdoor people protect the land they love by promoting non-partisan policies designed to protect our world.

The NGOs are represented by Fred Logue of FP Logue Solicitors and the request for internal review was prepared by Tim Johnston (counsel at the Law Library in Ireland and Brick Court Chambers in London), with support and input from Odette Chalaby (No5 Chambers) and Ali Al-Karim (Brick Court Chambers).

What are the next steps?

The internal review request was filed on Monday 15 January 2024. The Commission’s response is expected in May-June 2024.

If the Commission does not address the violations of environmental law that we have raised, or argues that such violations have not occurred, the NGOs will consider whether to bring a challenge before the Court of Justice of the European Union.

Disclosures by certain large EU companies on Taxonomy-eligibility will commence in 2024 with reporting on Taxonomy-alignment commencing in 2025 and 2026. If the Commission does not urgently reconsider, fossil fuel planes and ships will likely receive substantial funding from the current classification.