The Commission adopts a complementary act to the EU taxonomy: gas and nuclear under conditions

On 2 February 2022 the European Commission adopted a complementary delegated act to the EU taxonomy, which allows selected investments in natural gas and nuclear energy to be classified as a transitional activity supporting climate change mitigation – provided strict criteria are met. The decision provoked heated political discussion, but for the biogas and biomethane sector it is largely neutral: renewable gases have applied in the taxonomy since the start of the year on separate rules.

What changes

The taxonomy is a classification system meant to direct private capital towards sustainable investments. The first delegated act, applied from 1 January 2022, covered, among other things, biogas production, biowaste digestion and networks for renewable gases, but did not contain criteria for gas-fired and nuclear power plants. The complementary act fills that gap: it introduces criteria for specific activities in both sectors, with emission limits and deadlines for obtaining a building permit, and conditions for switching from natural gas to renewable or low-carbon gases.

Significance for the industry in Poland

Poland has for years stressed the need to recognise gas as a transitional fuel, and district heating and the power system will use gas for a long time to come. The provisions of the complementary act may make it easier to finance new peaking sources and cogeneration, provided they are prepared for switching to renewable gas.

Several conclusions follow for the biogas industry:

• natural gas in the taxonomy is transitional, and renewable gases – biomethane – are the target direction,
• investments in gas infrastructure "ready for renewable gases" gain credibility,
• competition between biomethane and natural gas does not disappear, but climate policy supports the former.

Where the dispute comes from

The Commission justifies its proposal by saying that some Member States need time to move away from coal, and gas and nuclear can help with this if subjected to strict criteria. Critics – including some countries and environmental organisations – point out that labelling fossil fuels as "sustainable", even transitionally, weakens the credibility of the taxonomy. The dispute thus concerns not biogas technologies but the direction of the whole policy of financing the transition.

Why biogas is the reference point here

In the logic of the taxonomy, renewable gas is the target solution and fossil gas the transitional one. In practice this means that new gas infrastructure, in order to meet the criteria, should be prepared to be supplied with renewable gases, and suppliers of biogas and biomethane gain a natural partner in every investment that is to meet this condition. The value of the gas grid as infrastructure for biomethane is an additional argument for maintaining it.

What next

The act will be subject to a four-month review (extendable by a further two months) by the European Parliament and the Council. Some Member States announce opposition. For biogas investors it is important that the criteria for renewable gases – including the sustainability rules for feedstocks – remain unchanged and are applied consistently across the Union.