New Report on Taxonomy Recommends Additional Classification Criteria

In parallel to the proposed “Omnibus”, which will likely revise the 2020 Taxonomy Regulation, the EU Platform on Sustainable Finance just issued a 397-page report recommending revisions to the technical screening criteria of the economic activities included in the Climate Delegated Act (DA) adopted in 2021. It includes suggested modifications to the “technical criteria” applicable to certain activities already listed in the Climate Delegated Act; for instance, lower CO2-emission thresholds for energy activities. It also proposes technical criteria for new activities to be listed in the upcoming revision of the Act. The list of new activities was proposed by the European Commission itself.

By way of background, the Taxonomy Regulation is an ambitious attempt at classifying activities based on sustainable criteria. To begin with, the Taxonomy differentiates “eligible” and “non-eligible” activities. Eligible activities are those which are listed in a delegated act of the 2020 Regulation (either the Climate Delegated Act of 2021 or the Environmental Delegated Act of 2023).

Eligible activities then need to identify whether they are “aligned” to the sustainable, technical criteria defined by a delegated act for each type of activity, and the percentage of alignment. 

The March 2025 Platform’s report suggests creating another term to define activities: “adapted activities”. These activities are necessarily “eligible” (i.e. listed in a delegated act) and identified as resilient to physical climate change impacts in their own operations and value chains. The purpose of the “adapted activities” category is to support climate resilience and incentivize financial institutions to invest more in activities which are better adapted to climate change.

The March 2025 report also recommends clarifying the definition of “enabling activities”. “Eligible” activities can be divided into two categories: 

• “Own performance activities” whose substantial contribution to climate-change adaptation or climate-change mitigation is made through their own direct impacts, and 
• “Enabling activities” whose substantial contribution is made indirectly through them enabling other activities to make a substantial contribution. 

The report notes that there have been inconsistent interpretations of what “enabling activities” mean and states that clearer and streamlined language would clarify what the requirement is about. Such clarification would be welcome, considering the variety of activities proposed by the European Commission as new enabling activities, which include, for instance, “Digital solutions and services for the Transition to a Circular Economy” and also “Mining of Lithium, Nickel and Copper for Climate Change Mitigation”.