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Taxonomy Regulation

The EU taxonomy is a classification system that establishes a list of environmentally sustainable economic activities taking into account the alignment of these activities against the following six environmental objectives:

  1. Climate change mitigation
  2. Climate change adaptation
  3. The sustainable use and protection of water and marine resources
  4. The transition to a circular economy
  5. Pollution prevention and control
  6. The protection and restoration of biodiversity and ecosystems

Taking these objectives into account, the taxonomy sets out 4 overarching conditions that an economic activity has to meet in order to qualify as environmentally sustainable.

  1. contributes substantially to any of a series of defined environmental objectives;
  2. doesn’t significantly harm any of the environmental objectives;
  3. complies with a series of minimum social safeguards; and
  4. complies with specified performance thresholds known as “technical screening criteria” (or TSC).

To specify further details and requirements, the Commission has put forward several Delegated Acts and FAQs. For instance, through different delegated acts, the EC is defining the technical screening criteria (TSC) (i.e., the detailed conditions) for each environmental objective.