In May 2018, the European Commission published a proposal to facilitate sustainable investment entitled “Taxonomy Proposal“. Cefic believes the Proposal may help finance environmentally friendly projects and foster cross-border investments by fixing common criteria. However, it fails to provide a definition of sustainable investments, since social and economic aspects of sustainability are only partially covered. The main objective of this proposal is to define the concept of environmentally sustainable investments with a view to channel capital flows towards this type of investments. The “Taxonomy Proposal” sets a framework to identify which economic activities are environmentally sustainable.

The European Parliament proposed amendments to include a definition of brown-listing in the Taxonomy proposal. This would have discriminated some form of fossil fuel investments. Thanks to Cefic advocacy efforts, these amendments were rejected in the committee vote on 11 March. The EU institutions won’t be able to finalize the legislative process of the Taxonomy proposal before the end of the European Parliament mandate in spring 2019. The plenary is supposed to vote in April. The trialogues are likely to start afterwards when the new European Parliament takes office.

To ensure that the “Taxonomy Proposal” supports the transformation of the Europe’s economy while creating a competitive advantage for the industry in innovative and sustainable technologies, Cefic:

  • calls on policy-makers to consider as environmentally sustainable all future investments enabling climate mitigation, circular economy and other environmental objectives. Only an inclusive definition of “environmentally sustainable investments” will secure the involvement of all sectors of the European economy in the transition towards a low-carbon circular economy.
  • considers that the “Taxonomy Proposal” should adequately reflect the functioning of industrial cross-sectorial value chains, beginning with raw materials and ending with final product. Basic manufacturing industries, such as the chemical sector, produce the building blocks of all environmentally beneficial solutions (No electrical vehicles are possible without the lightweight materials produced by the chemical industry; No windmills, solar panels or fuel cells are possible without chemicals).
  • asks for the full involvement of representatives of the manufacturing industry, including the chemical sector, in the elaboration of the technical screening criteria specifying the definition of environmentally sustainable activities.

The European institutions might not be able to finalize the files before the next European elections.