Brussels (Brussels Morning) A number of finance officials and NGOs have criticised the EU’s environmental financing rules for undue leniency towards the shipping sector and being too tough on buildings, Reuters reported Tuesday. Apart from this imbalance, critics say, the proposed rules are fair.
In coming decades, the system of classifying projects as sustainable or not should be a powerful tool for the EU when it comes to channelling funds towards projects that will bring the bloc closer to achieving the Paris Agreement goals.
The EU Commission’s Technical Expert Group (TEG) on sustainable finance presented its recommendations in March, and on Friday, policymakers released draft rules after months of collecting inputs from concerned parties.
About four more weeks are to be devoted to consultations. Critics have commended the strict criteria for power plants that burn fossil fuels and those that apply to the automobile industry. However, they take issue with rules for sea freight and for buildings.
Luca Bonaccorsi, European Federation for Transport and Environment NGO’s Sustainable Finance Director, warned that the proposed rules governing sea freight will not help in the move towards sustainable shipping.
Tristan Smith, associate professor at the UCL Energy Institute, noted that the proposed rules do not require ships to be capable of being refitted to use environmentally friendly fuels like hydrogen.
He pointed out that since ships currently rely on fossil fuels, they will likely have to switch to something greener in ten years or so. The proposed rules, he argued, are inadequate when it comes to building ships ten years from now.
On the other hand, draft rules for buildings are tougher than those proposed by the TEG since they require existing buildings to have the highest energy efficiency grade in order to get a green label. In this regard, Luca Bertalot, European Mortgage Federation Secretary General, stressed the importance of adopting “ambitious but also inclusive” rules.
Helena Viñes Fiestas, BNP Paribas Asset Management’s Global Head of Stewardship and Policy, welcomed the inclusion of R&D in the draft rules. Encouraging R&D would drive companies towards desired goals, she believed, and this would support the founding of start-ups and SMEs.