Taxonomy creates bureaucracy but does not bring significant climate benefits
The Finnish forest industry is disappointed with the decision by the EU member states to approve the first taxonomy criteria. The climate criteria will increase the administrative burden of forest companies and forest owners, but alleged climate benefits remain highly questionable. As the process continues, Finland must play an active role and ensure that the investment environment is not further weakened.
It was made public today the EU member states approved the Commission's controversial proposal, which includes the so-called taxonomy criteria for sustainable forest management. The taxonomy will be a key tool for the EU in its efforts to steer private investment in line with the EU's environmental objectives.
The Finnish government made a well-founded decision to object the Commission's proposal. Together with Finland, a total of 13 countries, including Sweden and France, objected the Commission's proposal. However, this was not enough to block the criteria from coming into force in January.
– Unfortunately, it took a long time for Finland to come up with a position and thus Finland did not have time to actively influence other Member States, says Timo Jaatinen, Director General of the Finnish Forest Industries Federation.
The fact that Sweden was among the countries objecting the Commission's proposal means that the proposal was criticized by the very Member States that have been firmly committed to sustainable forest management.
The proposal, now approved by the EU countries, has numerous shortcomings. Especially, a confusing and ambiguous set of criteria does not take into account the climate benefits of sustainable and active forestry. Instead, the threat is that we will have more passive forest owners in the future.
– The primary goal of the EU's sustainable finance regulation is something that we all support – more sustainably orientated financial markets and new sustainable investments. However, the taxonomy threatens to deviate from this goal, says Jaatinen.
It is telling that Finland, which intends to be climate-neutral 15 years before the EU, cannot support the Commission's proposal.
– This is a negative precedent of the Commission's unbalanced approach to sustainable and active forestry. The process undermines the predictability of the investment environment within the forest sector and the economy at large, Jaatinen says.
The Commission's sustainable finance platform is already drafting new taxonomy criteria and the Commission is due to adopt biodiversity criteria during the first half of the year 2022. The first draft by the platform was completely unreasonable and unworkable.
– While the recent decision by the MSs was unwanted, our work is not done. Before the Commission makes the proposal on new criteria Finland should be active. Efforts that weaken the investment environment and make it more difficult to reach climate targets should be stopped, says Jaatinen.
On sustainable finance:
Maarit Lindström, Director, Chief Economist, tel. +358 40 531 8262, email@example.com
Karoliina Niemi, Forest Director, tel. +358 50 567 9093, firstname.lastname@example.org