Several sustainability-focused investors and investment organizations have signed on to an open letter, along with scientists and NGOs, calling for new fossil gas projects to be excluded from the EU Taxonomy classifying sustainable investments.

The EU Taxonomy is part of the EU Action Plan on Sustainable Finance, established by the EU Technical Expert Group on Sustainable Finance’s (EU TEG). The taxonomy is a classification system enabling the categorization of economic activities that play key roles in contributing to at least one of six defined environmental objectives, and no significant harm done to the other objectives. The six objectives include climate change mitigation; climate change adaptation; sustainable use and protection of water and marine resources; transition to a circular economy; waste prevention and recycling; pollution prevention and control; and protection of healthy ecosystems.

According to the open letter, with signatories representing investors and organizaitns including Triodos Bank and Triodos Investment Management, Eurosif, ShareAction, and Climate Bonds Initiative, a new proposal from the European Commission would enable new gas cogeneration plants to be counted as green until the end of 2025 if they replace coal plants closing. By ignoring the impact of methane released in gas extraction, the letter warns that the proposal could result in significant environmental damage.

The letter states:

“Counting gas as green ignores the significant environmental effects of methane, whose impact on climate change is up to 84 times greater than CO2 in a 20-year timeframe. This means if only 3% of the gas leaks, it can cause more warming than coal. Furthermore, many European gas companies do not properly measure methane emissions in their supply chain and are not seizing the available opportunities to reduce these emissions. We have no time for false solutions. This is why neither coal-to-gas nor cogeneration (CHP) should be included in the Taxonomy.”

The group warns that this proposal opens the taxonomy to the possibility of becoming a greenwashing tool, precisely the opposite of its intention, and urges the commission to reject the proposal.

In a statement announcing its signing of the letter, Triodos Investment Management said:

“Including natural gas as sustainable does not help and only increases the risk of greenwashing. It could even provide an incentive to build more gas plants while failing to close more coal plants.”