How Practically Applicable Are the EU Taxonomy Criteria for Corporates?—An Analysis for the Electrical Industry

Abstract

This study addresses the current and future mandatory reporting on taxonomy alignment for companies within the EU, examining the practical applicability of criteria outlined in the Climate Delegated Act. Focusing on the electrical manufacturing industry through a case study, a five-step method was developed to assess the usability of the sector-specific criteria. The results highlight the need for enhanced usability across all criteria and offer key recommendations for policy development. Particularly, the substantial contribution criteria for climate change mitigation relating to the “manufacture of other low-carbon technologies” and “data-driven solutions for GHG emissions reductions” were found to be impaired by usability issues. These results emphasize the relevance of investigating the activities assessed in this study when policymakers revise the current criteria. Finally, the study highlights the necessity for future implementation of assessments to prevent usability issues and provide a holistic picture of the status quo of the current EU taxonomy criteria.