EU Sustainable Finance Taxonomy

Consultation reply on proposed delegated act

Properly designed, the Taxonomy is an important policy tool. The proposed delegated act provide, however, an impediment to the Taxonomy achieving its aims and risks slowing down the societal transition.

In its current form, the act does not recognize that sustainably managed forests are by their own right a material contributor to climate change mitigation and adaptation. The act has an immensely high degree of complexity, which makes it very hard for an operator to interpret the proposed criteria, which in turn will make implementation difficult and risks resulting in legal uncertainty. Furthermore, the act also references the need to demonstrate additionality, which requires evidence to illustrate that the activity is not customary. Where sustainable forest management is a customary practice under national law, based on principles defined by Forest Europe, it would by its nature be excluded from the Taxonomy.

Biomass from existing sustainable forest management offers products and solutions that help other industries make the transition to a carbon-neutral economy. By excluding existing sustainable forest management, the forest-based industries’ contribution to several European Green Deal objectives will be hampered. This means that the EU is less likely to meet objectives such as greening our building; a clean and circular economy; clean, affordable and secure energy; increased climate ambitions; preserving and restoring ecosystems and biodiversity; clean and smart mobility and green growth.

The Swedish Forest Industries asks for the act to be revised in a transparent and inclusive way. The following needs to be addressed:

  • The complexity of the criteria should be considerably reduced.
  • The reference to “improved forest management” should be replaced with “existing forest management”.
  • The criteria outlined by the Technical Expert Group (TEG) in its final report should be reinserted after adjustments.
  • Any references to close-to-nature management should be removed, as this concept lacks a scientifically based and broadly agreed definition.
  • Any reference to “additionality” should be removed, as this excludes existing sustainable forest management from being sustainable.

Read the full consultation reply here.