Environmental groups took the European Commission to court on Tuesday (18 April) after the EU executive rejected their request to withdraw fossil gas from the EU’s sustainable finance taxonomy.

In a controversial move last year, the European Commission gave gas power plants a ‘sustainable’ label under the EU’s green finance taxonomy, provided they meet a strict CO2 emissions threshold.

Gas power plants will be considered as a “transitional” technology under the EU taxonomy provided they replace existing coal-fired power stations, and “subject to clear limits and phase-out periods”, the EU executive said.

EU puts green label for nuclear and gas officially on the table

The European Commission on Wednesday (2 February) proposed including nuclear and gas power in the bloc’s sustainable finance taxonomy, recognising their contribution to the EU’s 2050 climate neutrality goal “subject to clear limits and phase out periods”.

That decision was challenged by four environmental groups – ClientEarth, WWF’s European Policy Office, Transport & Environment (T&E), and BUND (Friends of the Earth Germany).

The four started legal action in September to stop the inclusion of fossil gas in the bloc’s sustainable finance rulebook, arguing that the legislation clashes with the European Climate Law and does not respect the EU’s obligations under the Paris Agreement.

However, in February the Commission rejected their request, and the NGOs are now challenging this decision by filing a case with the Court of Justice of the European Union.

“Labelling fossil gas as ‘sustainable’ is as absurd as it is unlawful. It goes against the EU’s own scientific advice and fundamentally undermines the credibility of the EU’s climate action. Fossil gas is not clean, not cheap and not a secure source of energy,” said a spokesperson for the four green organisations.

The NGOs argue that gas cannot be considered a sustainable source of energy and has a huge impact on climate change as it is a high-carbon source when burnt, while its extraction and transport also lead to the release of methane, a powerful greenhouse gas.

Including fossil gas in the ‘green’ taxonomy would also worsen the EU’s dependency on imported fossil fuels, exposing EU member states to more price volatility, dependence on producing countries, and supply crises in the future, they add.

“We’re taking the Commission to court in the hope of restoring some credibility to the Taxonomy and avoiding this huge risk to the climate and people’s energy security,” the spokesperson said.

Contacted by EURACTIV, a Commission spokesperson said the EU executive “takes note of the legal action undertaken by several NGOs” but prefers not to comment on the substance of the case “before EU Court judgments are delivered”.

A hearing at the General Court is being scheduled for the second half of 2024, with a judgement expected to be released in 2025.

Greenpeace challenges nuclear and gas

A separate lawsuit at the Luxembourg-based European Court of Justice against the inclusion of gas and nuclear in the taxonomy regulation will also be filed by Greenpeace on Tuesday (18 April).

In September, Greenpeace organisations from eight countries asked the EU to review its decision, but their request was rejected.

As the lawsuit is being filed on Tuesday, activists from Greenpeace Luxembourg are planning to gather in front of the Court to protest the “green” label for gas and nuclear.