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Austria v. European Commission - application

Filing Year For Action

On October 7, 2022, Austria brought an action against the European Commission. It demanded the General Court annul Commission Delegated Regulation (EU) 2022/1214 of 9 March 2022, which qualifies investments in fossil gas and nuclear energy as “environmentally sustainable”. 

In 2020, the European legislator adopted the Taxonomy Regulation (EU) 2020/852 to direct investments toward sustainable projects and activities. Thereby, investments are considered environmentally sustainable if they involve one or several economic activities that qualify as environmentally sustainable under the criteria provided for in the Taxonomy Regulation. In 2021, the European Commission published Commission Delegated Regulation (EU) 2021/2139, which specified technical screening criteria to determine whether an economic activity substantially contributes to climate change adaptation and causes no significant harm to other environmental objectives. In 2022, the Commission amended the delegated legal act and released Commission Delegated Regulation (EU) 2022/1214, which includes specific activities relating to nuclear energy and fossil gas in the list of activities covered by the EU taxonomy. Nuclear energy and fossil gas investments thus qualify as “environmentally sustainable” investments under the Taxonomy Regulation.

Austria raised an action for annulment against Delegated Regulation (EU) 2022/1214 for violating primary and secondary EU law. It relied on 16 pleas in law, eight of which relate to nuclear energy, the other eight to fossil gas. Austria claimed a violation of several provisions of Regulation (EU) 2020/852, based on which Regulation (EU) 2022/1214 was adopted, as well as a violation of other (procedural) requirements and primary law. In concrete terms, the following claims were raised: 

First, Austria claimed a breach of procedural rules – allegedly, the Commission did not comply with the principles and procedural rules enshrined in Regulation (EU) 2020/852 (Taxonomy Regulation) and the Interinstitutional Agreement on better law-making. In particular, the Commission wrongly omitted to conduct an impact assessment and public consultation. Also, it did not assess the compatibility of Regulation (EU) 2022/1214 with the European Climate Change Act, as required by Art 6 para 4 of the Act. 

Second, Austria asserted that the Commission was not competent to enact Regulation (EU) 2022/1214. According to the requirement of materiality under Art 290 TFEU, the Union legislature would have had to decide to include nuclear energy in the taxonomy. It did not adopt such a decision; therefore, Austria held that nuclear energy does not qualify as environmentally sustainable under the Taxonomy Regulation. Further, it considered the precautionary principle to be violated. 

With regard to nuclear energy, Austria asserted that the qualification of nuclear energy as “environmentally sustainable” violates the “do no significant harm-principle” (DNSH principle) pursuant to Art 17 Regulation (EU) 2020/852 as well as the precautionary principle under primary law. The Commission allegedly failed to recognise the risk of significantly impairing protected environmental objectives due to severe reactor accidents and high-level radioactive waste. In addition, Austria asserted a violation of individual requirements for technical screening criteria under Art 19 Regulation (EU) 2020/852 as well as a violation of Art 10 para 2 and Art 11 Regulation (EU) 2020/852. Arguably, nuclear energy does not meet the criteria set out in Art 10 para 2 Regulation (EU) 2020/852 and does not substantially contribute to climate change adaptation as required by Art 11 Regulation (EU) 2020/852. 

In terms of fossil gas, Austria asserted a violation of the DNSH principle since qualifying fossil gas as “environmentally sustainable” aggravates climate change. Besides, Austria considered Art 10 para 2 Regulation (EU) 2020/852 and the precautionary principle to be violated as technologically and economically feasible low-carbon alternatives to fossil gas, which substantially contribute to climate change mitigation, already exist. In addition, Austria claimed that several of the requirements for technical screening criteria according to Art 19 Regulation (EU) 2020/852 were violated and brought forward a violation of Art 11 Regulation (EU) 2020/852 as economic activities relating to fossil gas do not substantially contribute to climate change adaptation. 

Austria v. European Commission

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

This sector creates and distributes information and entertainment through television, radio, print, and digital platforms.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Austria v. European Commission - application

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance