A coalition of non-governmental organisations (NGOs) supported by 35,000 citizens has initiated legal proceedings against the EU Commission at the European Court of Justice. The dispute centres around the Commission’s decision to include certain fossil fuel-powered planes and ships in the EU’s sustainable finance legislation, known as the EU Taxonomy.
The EU Taxonomy aims to provide a verified list of ‘green’ investments, guiding companies, investors, and policymakers towards activities that promote a sustainable transition. However, the NGOs—Dryade, Fossielvrij NL, and Protect our Winters Austria, supported by legal experts Opportunity Green and CLAW—argue that the inclusion of these vessels and aircraft contradicts the Taxonomy Regulation’s requirements.
In late 2023, the EU Commission introduced aviation and shipping criteria that allow ships and planes running on fossil fuels to qualify for green finance if they meet specific efficiency criteria. The NGOs formally requested a review of these criteria in January 2024, but the Commission refused in June 2024, leading to the current legal challenge.
The NGOs contend that the criteria are not based on conclusive science, do not align with a 1.5°C pathway, and may hinder the development of low-carbon alternatives. They point out that the shipping criteria could deem LNG-powered cruise ships as ‘green’, despite their significant CO2 and methane emissions. Similarly, the aviation criteria could label most of the order books of major airlines and manufacturers as ‘green’ due to relative efficiency gains of new aircraft models, despite the sector’s growing carbon footprint and non-CO2 impacts.
The EU Taxonomy Regulation stipulates that sustainable activities must be backed by conclusive scientific evidence and align with a 1.5°C pathway. However, the NGOs argue that the Commission’s criteria, if implemented, could disregard recent studies warning of rising methane emissions – partly caused by maritime activities – and the imminent exhaustion of aviation’s carbon budget. They assert that investments in these vessels and aircraft could lock in decades of pollution, posing a severe threat to the 1.5°C decarbonisation pathway.
David Kay, Legal Director at Opportunity Green, stated, “The Taxonomy is set to mobilise billions of Euros of private finance. But the aviation and shipping criteria send completely the wrong signal to investors – directing investments to planes and ships that will pollute the climate for decades to come.”
Hiske Arts at Fossielvrij added, “The EU has chained us to climate catastrophe by rubber-stamping extremely polluting planes and cruise ships as green.”
The NGOs filed their case on 27 August 2024, represented by a team of legal experts from various chambers and solicitors including Fred Logue and Tim Johnston, with support from Odette Chalaby (No5 Chambers), Esther Drabkin-Reiter (Francis Taylor Building), and Margherita Cornaglia (Doughty Street Chambers).
