The Commission presents a delegated act to the taxonomy: biogas, biowaste digestion and landfill gas

On 21 April 2021, the European Commission presented a delegated act to the EU taxonomy, which sets out technical screening criteria for activities making a substantial contribution to climate change mitigation and adaptation. The act covers, among others, the production of biogas and energy from bioenergy, the digestion of biowaste and sewage sludge, composting, and the capture and use of landfill gas. It is a continuation of the work of the Technical Expert Group on Sustainable Finance (TEG), whose final report was published in March 2020.

Activities important for biogas and waste

The activities covered include, among others:

• generation of electricity from bioenergy;
• production of biogas and biofuels for transport;
• cogeneration and generation of heat from bioenergy;
• transmission and distribution networks for renewable and low-carbon gases;
• anaerobic digestion of sewage sludge;
• anaerobic digestion of biowaste;
• composting of biowaste;
• capture and use of landfill gas.

The criteria combine requirements on life-cycle greenhouse gas emission reductions with requirements on feedstocks. For biowaste digestion, among others, separate collection of biowaste, a plan for monitoring and limiting methane leakage, and the use of digestate as a fertiliser or soil improver – directly or after composting – are required.

What is not in the act

The act does not cover thermal treatment of municipal waste, and as for natural gas and nuclear energy the Commission decided that they will be settled in a separate procedure. For the waste-to-energy industry this is an important signal: incinerators did not appear on the list of "green" activities in the climate taxonomy.

Significance for investors

For owners of biogas plants and biowaste digestion facilities, the criteria mean that when choosing projects, banks and funds will assess not only their profitability but also their compliance with requirements on emissions, feedstocks and digestate. Installations that accept biowaste from separate collection, monitor methane leakage and manage digestate in line with the criteria will be better placed in the assessment as "green" investments.

It is also worth noting that the criteria for bioenergy refer to the sustainability rules in the Renewable Energy Directive, which links the two regulations.

What next

The delegated act is subject to scrutiny by the European Parliament and the Council. Under the Taxonomy Regulation, criteria for the other environmental objectives (water, the circular economy, pollution, biodiversity) are to be set in subsequent acts. For the waste industry it will be important what requirements are laid down for the circular economy.

Where to look for details

The full technical criteria take the form of annexes to the act and describe each activity separately: the conditions of substantial contribution, the "do no significant harm" requirements in relation to the other environmental objectives, and the required evidence. For biogas projects, the provisions on the origin of feedstocks and on life-cycle emissions will be especially important. Before submitting a financing application, it is worth analysing the description of the specific activity, and not only its name.