04 Mar 2022, 13:16
Sören Amelang

EU rules for green investments could slow down German energy transition

Süddeutsche Zeitung

The EU’s green investments label could slow down Germany's energy transition as many renewable projects don't qualify for it, Süddeutsche Zeitung reports. Banks are only allowed to register wind project financing as "green" if the involved windpower company has more than 500 employees and is capital market orientated, according to article 8 of the EU green finance taxonomy. But the newspaper states that many wind park operators do not fulfil this criteria, resulting in a disincentive for banks to finance their projects. The rules could result in banks that finance many windpower projects having to declare a green financing quota of zero percent, in contrast to large institutions that finance nuclear and gas companies.

"Everybody would agree that a windpower park is green," Andreas Gruber, who heads the sustainability division at Deutsche Kreditbank (DKB), told the paper. "The fact that we cannot label them as such is the opposite of transparency for us – and in the end also a competitive disadvantage. The taxonomy doesn't give banks an additional incentive to invest in renewables." Sustainability bank GLS manager Thomas Jorberg said the rules not only put banks that finance small and medium-sized enterprises at a disadvantage, but also smaller project operators. Even Munich's large public utility, which is planning many renewable energy projects, said it didn't see any positive effects on financing, because it doesn't fulfil the criteria of being capital market oriented.

The EU taxonomy is a classification system that defines and ranks environmentally sustainable economic activities as a framework to allow investors to shift investments to climate-friendly alternatives

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