EU Taxonomy and the Construction Sector

The Construction 2050 Alliance published six key messages regarding the EU Taxonomy and its influence on the construction sector. For example, the Alliance underlined: 

• the importance of the sector for achieving the EU Green Deal and 
• how the taxonomy can set a new benchmark for competitiveness in the construction sector.

However, they also argued that the:

• planned reporting criteria should be improved in certain aspects,
• reporting obligations need to be simple and proportionate, especially for SMEs,        
• taxonomy must create the conditions for mobilizing capital to support the sustainable transition and       
• non-alignment with the taxonomy must not lead to a cut in access to financing and funding.

The Alliance consists of organizations representing the European construction sector for Austria, e.g. the WKO (Austrian federal economic chamber), the Fachverband Bauindustrie, or the Bundesinnung Bau joined.  

The taxonomy itself is a long list of economic activities that can be deemed "green", if:

• they contribute to one of the taxonomy's goals,
• fulfill the technical screening criteria,
• meet the social minimum safeguard and
• do not violate the Do No Significant Harm (DNSH) principle.

The current taxonomy includes the two climate goals, "climate change mitigation" and "climate change adaption", which include the construction and real estate sectors.

However, the taxonomy will also include four additional environmental goals expected in 2023. Currently (11/2022), the draft version of the extension has been published. It includes the taxonomy goal of "transition to a circular economy", which is crucial for the construction sector and the EU Commissions' goals. The economic sectors included in this goal are, for example, the:

• construction of new buildings,        
• renovation of existing buildings or        
• maintenance of roads and motorways

For instance, if a company is active in one of those economic activities (mentioned above), the turnover, OpEx, or CapEx of the activity will be eligible for the taxonomy.

If it also fulfills the substantial contribution criteria (see below*) and does not violate the "Do No Significant Harm" criteria (see below **). The activity's turnover, OpEx, or CapEx could be classified as aligned with the taxonomy.