This table summarizes EU Taxonomy’s life-cycle assessment requirements for the sectors that have requirements applied to them directly via the EU Taxonomy.
|
Sector |
Methodologies |
Third-party verification |
Matching tools |
|
New buildings & renovation |
EN 15978 and Level(s) LCA |
No |
EN 15978 tool, Level(s) LCA tool |
|
Transport infrastructure |
GHG Accounting, Scopes 1-3 |
No |
LCA EN 17427, Carbon Strategy tools |
|
Renewable energy |
ISO 14067 |
Yes |
Product LCA tools |
|
Manufacturing |
ISO 14067 |
Yes |
Product LCA tools |
In EU Taxonomy, where ISO 14067 is mentioned as the GHG accounting standard, ISO 14064-1:2018 or Commission Recommendation 2021/2279/EU can be used instead.
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Skip to the screening criteria.
The EU Sustainable Finance Taxonomy creates a classification for sustainable activities and helps steer investments to achieve the EU’s sustainability objectives. It is legally binding from 2021, with provisions for circularity and biodiversity added in 2023.
The EU Sustainable Finance Taxonomy (shortened to Taxonomy), or Regulation (EU) 2020/852 is a sustainability classification system for economic activities. The Taxonomy was made legally binding in June 2021 — initially, only covering climate change.
The Taxonomy is an essential tool for all types of investors and financial market participants (asset owners, asset managers, insurance companies, and banks) — as well as listed companies and large companies operating in Taxonomy-covered sectors with business in the European Union, and those raising a significant amount of funding from the European Union.
The Taxonomy makes it possible to identify sustainable activities and to identify sustainable investments. In essence, it provides sector-specific sustainability benchmarks.
The EU Taxonomy is a set of interacting regulations.
The full name of the first set of the regulation is Commission Delegated Regulation (EU) 2021/2139. It is from the 4 June 2021 supplementary Regulation (EU) 2020/852 of the European Parliament and of the Council. It establishes the technical screening criteria for determining the conditions under which economic activity qualifies as contributing substantially to climate-change mitigation or climate-change adaptation, and for determining whether that economic activity causes no significant harm to any of the other environmental objectives.
The Taxonomy is the underpinning technical method for a number of key regulations, as shown below.
| Regulation | Role of the Taxonomy |
| Sustainable Finance Disclosure Regulation (SFDR) |
Compulsory for financial market participants as of 10 March 2021 |
| Green Bond Standard (GBS) and the EU Green Bond Framework | EU Taxonomy requirements used to define eligibility criteria |
| Supports reporting requirements | |
| Disclosures need to be aligned with the Taxonomy | |
| A tool to scale up sustainable investment to implement the EU Green Deal |
Read more about the growing number of other policies and legislation regulating embodied carbon in construction here.
In order to be Taxonomy-eligible, an economic activity must contribute substantially to at least one of the six environmental objectives of the European Green Deal and do no significant harm to the others, as well as meeting minimum social safeguards.
The requirements are now set for all environmental objectives. The initial screening criteria were developed by the EU Technical Experts Group, and supported by the independent platform on sustainable finance.
The Taxonomy has been in force since 12 July 2020 and the screening criteria were set in law on 9 December 2021. Businesses are required to disclose their activities’ compliance for the calendar year 2021 with criteria for climate change mitigation or adaptation in 2022. For the four other environmental objectives, for which the technical screening criteria were issued in April 2023, these are required to be disclosed for the calendar year 2024 to a limited extent. Full provisions apply from 2025 onwards. In any case, reporting ultimately needs to cover all six environmental objectives.
The Taxonomy affects companies offering financial products, including pension funds, and non-financial companies with over 500 employees (as covered by the EU Non-Financial Reporting Directive), and EU member states setting public measures, standards, or labels for green financial products or green corporate bonds.
All companies subject to the Taxonomy will need to describe how and what share of their activities are Taxonomy-aligned for each financial year they report (from 2021 onwards). For non-financial companies, the disclosure must include:
Financial market participants subject to the Taxonomy are required to complete their first disclosures for the activities that substantially contribute to the environmental objectives. For each relevant product, the financial market participant is required to state:
Taxonomy’s detailed rules, called technical screening criteria, are issued only for sectors which have a high impact and a potentially high positive contribution. An activity can fulfill requirements of multiple environmental objectives, but double counting is not allowed.
The below table cross-references the sectors for which rules are set to meet Taxonomy’s various environmental objectives leveraging life-cycle assessment and circularity metrics.
|
Environmental objective |
Climate change mitigation |
Circular economy |
Other environmental objectives |
|
Buildings |
New buildings: GWP reporting using Level(s) |
New buildings and renovations: GWP reporting using Level(s) & circularity reporting |
N/A |
|
Infrastructure |
Infra for air, water, rail, road, and public transport: conduct carbon footprinting for scopes 1-3 that show the project does not add GHGs |
Treatment of hazardous waste: show that activity does not on life-cycle basis increase GHGs compared to primary raw materials |
N/A |
|
Energy supply |
Electricity from hydropower, geothermal energy, renewable non-fossil gaseous and liquid fuels, co-generation from geothermal energy, and production of heat/cool from geothermal energy: life-cycle GHG emissions limit of 100gCO2e/kWh |
N/A | N/A |
|
Manufacturing |
Manufacturing: low carbon technologies, hydrogen, organic basic chemicals and plastics in primary form. Life-cycle GHG emissions calculated using ISO 14067 Basic construction materials, including cement, aluminum, iron and steel apply manufacturing GHG emissions thresholds compatible with the EU ETS with physical emission measurement (2019/331) |
Manufacture of plastic packaging goods: life-cycle emissions calculated using ISO 14067 |
Pharmaceutical manufacturing, pollution prevention & control: water footprint, ISO 14046 |
These rules apply to the development of construction projects and the actual construction and renovation of residential and non-residential buildings. This covers NACE codes F41, F41.2 and F43.
New buildings can qualify via climate change mitigation, and both new buildings and renovations can qualify via circular economy.
The following requirements have to be met:
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The life-cycle Global Warming Potential (GWP) of the building has been calculated for each stage in the life cycle.
Construction design and techniques incorporate design for adaptability and deconstruction. This is demonstrated by using Level(s) 2.3 Indicator on construction and demolition waste at Level 2, and 2.4 Overarching assessment tool: Cradle-to-grave life cycle assessment (LCA), also at Level 2.
The project demonstrates for the three heaviest material categories (of those below) with the maximum share of primary raw material used:
|
Material category |
Maximum primary raw material share for new buildings |
Maximum primary material share for newly added material in renovations |
|
Combined total of concrete, natural, or agglomerated stone |
70% |
85% |
|
Combined total of brick, tile, and ceramic |
70% |
85% |
|
Bio-based product |
80% |
90% |
|
Combined total of glass & mineral insulation |
70% |
85% |
|
Non-bio based plastics |
50% |
75% |
|
Metals |
30% |
65% |
|
Gypsum |
65% |
83% |
Where recycled content is not known, it’s calculated as 100% primary raw material. Where a construction product is re-used, it is to be counted as comprising zero primary raw material. Results are to be exported as a bill of quantities and stored in a digital format.
Transport infrastructure can only qualify via climate change mitigation. These rules apply for practically all types of transport infrastructure, bar pedestrian routes, as set out below.
In case of new infrastructure or major renovation, the infrastructure has been climate proofed in accordance with the appropriate climate proofing practice that includes carbon footprinting and clearly defined shadow cost of carbon. Such carbon footprinting covers scope 1-3 emissions, and demonstrates that the infrastructure does not lead to additional relative greenhouse gas emissions, calculated on the basis of conservative assumptions, values, and procedures.
At least 70% of the non-hazardous construction and demolition waste (CDW) is reused or recycled, including backfilling that substitute’s primary materials.
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This refers to the construction, upgrade, and operation of dedicated facilities for the treatment of hazardous waste as a means for material recovery operations.
The activity, on a life-cycle basis, does not increase GHG emissions as compared to the production based on the equivalent primary raw material(s).
Life-cycle greenhouse gas emissions are calculated using ISO 14067 and are verified by an independent third party.
Life-cycle GHG emissions savings are calculated using the ISO 14067 methodology, and quantified life-cycle GHG emission savings are verified by an independent third party. Furthermore, for hydrogen, a set limit value applies and for other products, and conditional limit values apply.
The list of organic basic chemicals targeted includes acetylene, ethylene, propylene, butadiene, within aromatics, mixed alkylbenzenes, mixed alkylnaphthalenes other than HS 2707 or 2902, cyclohexane, benzene, toluene, o-Xylene, p-Xylene, m-Xylene and mixed xylene isomers, ethylbenzene, cumene; biphenyl, terphenyls, vinyltoluenes, other cyclic hydrocarbons excluding cyclanes, cyclenes, cycloterpenes, benzene, toluene, xylenes, styrene, ethylbenzene, cumene, naphthalene, anthracene; benzol (benzene), toluol (toluene) and xylol (xylenes), naphthalene and other aromatic hydrocarbon mixtures (excluding benzole, toluole, xylole), vinyl chloride, styrene; ethylene oxide; monoethylene glycol, and adipic acid.
Data-driven solutions for GHG emissions reductions, and manufacturing of technologies aimed at substantial GHG emission reductions in other sectors of the economy, which are not covered separately, and where they demonstrate substantial life-cycle GHG emission savings compared to the best performing alternative technology, product, or solution available on the market, can qualify if their quantified life-cycle GHG emission savings are calculated according to ISO 14067 and verified by an independent third party.
For plastic manufactured from chemical recycled feedstock, life-cycle GHG emissions of the manufactured plastic, excluding any calculated credits from the production of fuels, are lower than the life-cycle GHG emissions of the equivalent plastic in primary form manufactured from fossil fuel feedstock. Life-cycle GHG emissions are calculated using ISO 14067 and verified by an independent third party.
Basic construction materials, including cement, aluminum, iron, and steel apply manufacturing GHG emissions thresholds compatible with the EU Emission Trading system mechanism using the physical measurement of emissions (2019/331). All large production units already apply these measurements as part of their Emission Trading obligations.
This covers manufacturing of active pharmaceutical ingredients (API) or drug substances and manufacturing pharmaceutical products (NACE code C21.1 and C21.2).
To qualify, products must show that their use in products (substitution) does not lead to an increment of lifecycle GHG emissions, calculated using ISO 14067, and verified by an independent third party.
If the products are made using hydrogen, carbon black, chlorine, organic basic chemicals, anhydrous ammonia, nitric acid, their GHG emissions should not exceed the limits set for these products.
Operators also must assess the water footprint of the chemical production processes in line with ISO 14046:2014 and ensure that they do not contribute to water scarcity, also verified by an independent third party.
The following energy production types are applying a life-cycle emissions limit to qualify:
To qualify, the life-cycle GHG emissions must be lower than 100 g CO 2 e/kWh. Life-cycle GHG emissions are calculated based on project-specific data, where available, using ISO 14067 and verified by an independent third party.
One Click LCA offers Taxonomy solutions that span the built environment.
One Click LCA supports these Taxonomy-relevant sectors with the following tools:
- New building construction: One Click LCA for Buildings, EN 15978 and Level(s) tools, and One Click LCA Carbon Designer 3D
- Civil engineering works: One Click LCA for Infrastructure and GHG Reporting
- Manufacturing: One Click LCA EPD Generator, using ISO 14067
- Renewable energy generation: One Click LCA EPD Generator, using ISO 14067