The EU Taxonomy threatens the progress on climate change and Swedish competitiveness

The European Commission’s draft Delegated Regulation on technical screening criteria presented in November 2020 lacks technology neutrality and a systemic perspective. Therefore, we stress that the following aspects should be considered:

• The EU Taxonomy must promote innovation, new technology and transitional investments. The development of new technical solutions is a prerequisite if we are to cope with climate change. There is an obvious risk that the financing necessary for this type of investments will not be covered by the taxonomy and will thus be deemed unsustainable.
• A cost-effective and delivery-secure electricity system with a 2045 perspective presupposes extensive reinvestments in all existing hydropower and nuclear power generating capacity. It is therefore worrying that there is an obvious risk that these two fossil-free sources of power might be classified as unsustainable in the taxonomy.
• The taxonomy risks contributing to Swedish climate-smart production being regarded as ‘less’ green. As a result, large sections of Swedish industry would lose some of what had been a competitive advantage over their international competitors. Globally, this would lead to increased emissions.
• Biofuels are key for Sweden to be able to effectively phase out the use of fossil fuels in the transport sector, which today accounts for around one-third of our total CO2-emissions. It is therefore understandably worrying that the taxonomy disadvantages biofuel use.
• The forestry industry and forest-based raw materials are needed to deliver the green transition. It is therefore very unfortunate that the taxonomy can classify the sustainable Swedish forestry industry as an unsustainable activity.