EU Taxonomy to update technical screening criteria for sustainable activities

On the whole, the EU Taxonomy could have a bullish impact on the guarantees of origin (GO) and Power Purchase Agreement (PPA) markets by stimulating demand for renewable electricity and help boost the supply side of the market by incentivising investments in RES-E. However, the European Central Bank observes that green investments in the energy sector through the mechanism have been relatively limited.

The updated technical screening criteria can support the supply side of the GO and PPA markets by directing investments into renewable energy projects through gradually tightening emission thresholds for energy activities; whereas suggested sustainable activities in critical metals extraction may have a modest demand-side impact as their extraction is limited in the EU.

EU Taxonomy is a classification system that establishes a list of sustainable activities, in force since 2020. It places an obligation on European listed companies (such as those falling under the scope of the Corporate Sustainability …