Europe Drafts Green Investment Standards From Cars to Houses

Europe is seeking to define what qualifies as green across the economy in a bid to attract billions of euros into projects compatible with its ambition of becoming the world’s first climate-neutral continent.

The European Union’s regulatory arm will next week unveil the first set of criteria for investment decisions in the unprecedented transition to a low-carbon economy. The standards for whether an activity contributes to the fight against climate change will cover dozens of industries, from transport to water supply and renewable energy.

The classification system for green investment, known as taxonomy, is part of a broader package to make the 27-nation bloc’s finance more sustainable. It will underpin the region’s economic recovery program centered around the Green Deal, a sweeping strategy to reach net-zero emissions by 2050.

As the EU shifts away from fossil fuels, it seeks to entice its industry to embrace cleaner energy sources. The green label system will apply to sectors across the economy, which will get assigned emissions or efficiency criteria for their products to be qualified as sustainable, according to a draft of the EU measure obtained by Bloomberg News.

Here are some examples of who can earn the green label:
  • Producers of rechargeable batteries, battery packs and accumulators, including from secondary raw materials, that substantially reduce greenhouse gases in transport, stationary and off-grid energy storage
  • Manufacturers of energy efficiency equipment for buildings, such as certain windows, doors, insulating products, smart meters or heat pumps
  • Solar and wind energy producers
  • Hydropower and bioenergy producers under certain conditions
  • Trains and passenger coaches that have zero direct CO2 emissions
  • Passenger cars and light commercial vehicles with emissions lower than 50 grams of CO2 per kilometer until end-2025 and zero emissions thereafter
  • New residential and non-residential buildings meeting certain efficiency standards

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