Sustainable finance

On 8 January 2025, the Platform on Sustainable Finance published a draft independent report on preliminary recommendations for the review of the Climate Delegated Act and the addition of activities to the EU taxonomy for sustainable activities. EGEC responded to the call for feedback, which closed on 5 February 2025. EGEC also wrote to Valdis Dombrovskis, EU Commissioner for Economy and Productivity. EGEC called for simplification of the Sustainable Finance Taxonomy by placing geothermal on an equal footing with wind and solar energy in relation to lifecycle emissions, as the existing rules put a brake on capital market investments in geothermal.  Geothermal energy technologies are clearly identified as sustainable investments in the sustainable finance taxonomy. Geothermal power plants, geothermal district heating and cooling, geothermal cogeneration, geothermal heat pumps, UTES and other forms of thermal energy storage can all be eligible as a “sustainable investment”. Nevertheless, pursuant to the substantial contribution criterion to climate change mitigation, the production of geothermal electricity and heat and cool generation are all required to comply with an emission threshold of LCE<100g CO2e/kWh verified by independent third party. This criterion is not asked for other renewable energy sources.  EGEC contribution in brief  EGEC deems that the abovementioned threshold should be removed for all geothermal technologies for the following reasons:  As regards the respect to the ability to comply with and/or implement (e.g. technical feasibility) the technical screening criteria for substantial contribution of the activity, the criteria put in place for geothermal appear to be unfair when compared to the ones applied to other renewables. The EU taxonomy has so far sent the wrong signal for electricity, heat and cool generation from geothermal energy, despite the low CO2 eq/kWh.  After evaluating several scientifically based life cycle analyses for geothermal plants, it can be stated that the threshold value of 100gCO2-eq/kWh specified in the EU taxonomy for the LCA is always undercut for representative plants. This threshold should then be removed for all geothermal technologies.  The obligation to carry out an LCA is seen as an additional obstacle for geothermal heat and cool generation.  The mandatory performance of an LCA contradicts the general endeavour to speed up the planning and construction of geothermal plants.  Therefore, EGEC wishes to see the same criteria applied to all renewable energy technologies and proposes then to erase from Commission delegated Regulation (EU) 2021/2139 the threshold for geothermal and the LCA obligation required to geothermal activities to comply with the substantial contribution to climate change mitigation.    EGEC's response to consultation on the EU Taxonomy Regulation (PDF)

EGEC provided its answer to a questionnaire which allowed stakeholders to suggest potential revisions of existing activities that are already covered in an EU Taxonomy Delegated Act in force (see Taxonomy Climate Delegated Act and Taxonomy Complementary Delegated Act) or under scrutiny by EU co-legislators (see Taxonomy Environmental Delegated Act and amendments to the Taxonomy Climate Delegated Act) or to suggest new economic activities that should be added to the EU Taxonomy. 

download the factsheet

EGEC sent an official letter to the members of the Platform on Sustainable Finance to ensure that the “Full list of Technical Screening Criteria” in Annex B accurately reflects the environmental benefits of geothermal technologies.

As the European Commission prepares criteria for supplementary Delegated Act in Autumn, NGOs outline how including gas in the Taxonomy would turn it into a greenwashing tool, completely undermining its credibility and sending a disastrous global signal.

EGEC’s contribution is focused on three main priorities:

In its statement, EGEC strongly highlighted that fossil methane does not have a role in the EU’s Sustainable Finance Taxonomy Regulation.

The sustainable finance regulation is a key opportunity to unlock the access to public and private finance for key renewable energy technologies, allowing the EU to implement its decarbonisation objectives. The implementation of the sustainable finance regulation, the establishment of a sustainable finance framework and the financing of sustainable investment however requires stakeholders to understand the needs of specific technologies that actively contribute to these objectives.

Inception Impact Assessment on a Delegated Regulation on a climate change mitigation and adaptation.

Sustainable finance is an increasingly important topic in European policy making. A proposed regulation by the European Commission on this topic will have a major impact on the private financial sector, and its relationship with geothermal and other renewable energy investments.