The EU taxonomy will be incorporated into Norwegian law through the EEA agreement with effect from January 1st 2022. Then, it will not only be an advantage to be green, but it will be a necessity for the company's competitiveness. This classification system will establish a climate-neutral Europe and will affect the entire business community, regardless of industry and size.
Although many are looking at the challenges surrounding the shift, this system and the green transition will contribute to a number of business opportunities.
What is the «EU taxsonomy»?
In short, the EU taxonomy is a classification system that shows the extent to which an economic activity is sustainable or not. This system contributes to a more systematized understanding of what sustainability actually is, which has so far been diffuse for most people. The EU taxonomy will also prevent greenwashing, because companies will now have a standard to conform to.
Three Requirements to Getting Classified as Sustainable Economical Activities
In order for an economic activity to be classified as sustainable, it must:
- Contribute significantly to at least one of the six defined environmental objectives of the EU.
- Do not harm the other defined environmental objectives
- Meeting minimum requirements for social rights (OECD + ILO)
The EU Taxsonomy's Six Environmental Goals
- Climate change mitigation
- Pollution prevention and control
- Transition to a circular economy, waste prevention and recycling
- Protection of healthy ecosystems
- Sustainable use and protection of water and marine resources
- Climate change adaptation
From January 1st 2022, companies covered by the EU taxonomy will report on the first two environmental targets. Objectives 3-6, enter into force in the EU from January 1st 2023. Although it may take time before these criteria enter into force in Norway, it is important to be aware that European actors may become more concerned with the taxonomy regulations when they enter into force in the EU. Norwegian companies that operate internationally, will most likely to be affected by the requirements imposed through Norwegian legislation.
How Does the EU Taxonomy Affect the Construction and Real Estate Sector in Norway?
Loans, investments and insurance of so-called "gray buildings" can eventually involve high risk for banks, investors and insurance companies. The EU's taxonomy is now the basis for the criteria Norwegian financial institutions use to dvelop their own criteria for green investments and green lending. This means, among other things, better conditions for green buildings. In the future, it may become an absolute requirement to meet the requirements of the EU taxonomy to obtain financing and insurance.
The EU taxonomy covers many different environmental areas. According to the Green Building Alliance, the following criteria have been established for a new building to be defined as sustainable:
- Must arrange for at least 70% of the construction and demolition waste to be reused or recycled.
- Must have energy requirements 10% lower than the national Nearly Zero Energy Building (NZEB) definition. Both energy efficiency and renewable energy production are included in the definition.
- Buildings over 5000 m2 are requiered to document air tightness and cold bridge value.
- Buildings over 5000 m2 must have and make available a CO2 calculation for the building's life cycle.
- Must be robust to withstand expected climate changes
- Must have water-saving installations. Homes are exempt from the requirement for water-saving installations. At the construction site, ensure that nearby water maintains the same quality and that the water balance is not disturbed.
- May not contain environmental toxins defined by REACH.
- Must have low degassing for indoor climate.
- Must have mapped contaminated ground
- Must take into account dust and noise load during the construction period
- Cannot be built in nature reserve
- Cannot be built on land with high agricultural value
Find the detailed criteria and specifications here: pg 166.
Become circular:
