Taxonomy Complementary Climate Delegated Act (CDA) – Why it is needed
27 June 2022
In its July plenary, the European Parliament will vote on the Complementary Climate Delegated Act (CDA) that should include, under strict conditions, specific nuclear and gas energy activities in the list of economic activities covered by the EU taxonomy.
There are four key reasons why this CDA is direly needed:
- To preserve security of electricity supply
- To support REPowerEU
- To allow gas power plants to switch to renewable fuels
- To avoid an excessive use of gas power plants
ACER, the organisation of European energy regulators, and the European Commission both recently published reports highlighting the need for new investments in firm low-carbon capacity (power plants) that can cover supply in times of low renewable output (so called “dunkelfaute” or “dark doldrum” periods).
Over time, these plants will use renewable hydrogen and biogas. Taxonomy is about creating a suitable framework for such kinds of sustainable investments.
REPowerEU foresees replacing fossil gas from Russia and a faster growth of electricity supply by renewables – the CDA supports this approach. How? By recognising the need for investments in technologies that ensure the reliability of the electricity system when renewables cannot meet demand, and by requiring these plants to decarbonise their fuel supply.
The Taxonomy CDA foresees that, by 2035, gas power plants must be as clean as any other sustainable technology. This will be achieved via a switch of those same plants to renewable fuels.
Renewable hydrogen and biomethane production should grow strongly thanks to the REPowerEU Plan. As soon as sufficient climate-neutral gases are available, power plants will switch. In the meantime, the Taxonomy CDA requires reporting natural gas and nuclear activities into a separate category, to ensure transparency.
The taxonomy CDA’s annual carbon budget approach and the required switch to renewable gases by 2035 avoid that gas power plants will be used in competition with renewables.
Gas power plants will be used as a complementary solution in case of electricity shortages. In combination with high natural gas and ETS certificate prices, the CDA will limit the operation of gas plants to the absolute necessary, while maintaining an essential insurance mechanism for a reliable electricity system.
For more information on the Taxonomy CDA, read our detailed analysis here.