With a letter to Commissioner for Economy and Productivity Implementation and Simplification Valdis Dombrovskis, EGEC provided its answer to a call for feedback by the Platform on Sustainable Finance on the draft report on preliminary recommendations for the review of the Taxonomy Climate Delegated Act and additional technical screening criteria for the EU Taxonomy.
EGEC request is to simplify the Sustainable Finance Taxonomy by placing geothermal on an equal footing with wind and solar energy in relation to lifecycle emissions, as the current rules put a brake on capital market investments in geothermal.
Geothermal energy technologies are clearly identified as sustainable investments in the sustainable finance taxonomy. Geothermal power plants, geothermal district heating and cooling, geothermal cogeneration, geothermal heat pumps, UTES and other forms of thermal energy storage can all be eligible as a "sustainable investment". Nevertheless, pursuant to the substantial contribution criterion to climate change mitigation, the production of geothermal electricity and heat and cool generation are all required to comply with an emission threshold of LCE<100g CO2e/kWh verified by independent third party. This criterion is not asked for other renewable energy sources.
EGEC contribution in brief
EGEC deems that the abovementioned threshold should be removed for all geothermal technologies for the following reasons:
- As regards the respect to the ability to comply with and/or implement (e.g. technical feasibility) the technical screening criteria for substantial contribution of the activity, the criteria put in place for geothermal appear to be unfair when compared to the ones applied to other renewables. The EU taxonomy has so far sent the wrong signal for electricity, heat and cool generation from geothermal energy, despite the low CO2 eq/kWh.
- After evaluating several scientifically based life cycle analyses for geothermal plants, it can be stated that the threshold value of 100gCO2-eq/kWh specified in the EU taxonomy for the LCA is always undercut for representative plants. This threshold should then be removed for all geothermal technologies.
- The obligation to carry out an LCA is seen as an additional obstacle for geothermal heat and cool generation.
- The mandatory performance of an LCA contradicts the general endeavour to speed up the planning and construction of geothermal plants.
Therefore, EGEC wishes to see the same criteria applied to all renewable energy technologies and proposes then to erase from Commission delegated Regulation (EU) 2021/2139 the threshold for geothermal and the LCA obligation required to geothermal activities to comply with the substantial contribution to climate change mitigation.
Find HERE our full position explaining in detail all the arguments reported above.
