BayWa CEO Prof. Klaus Josef Lutz criticizes EU taxonomy

The CEO of BayWa AG, Prof. Klaus Josef Lutz, warns of increased costs and delays in the energy and climate transition due to the EU taxonomy and comments:

"The current discussion massively overlooks the fact that companies that have been making a clear contribution to a climate-neutral energy supply for decades will soon be at a disadvantage due to the EU taxonomy, compared to less sustainable business models. While nuclear and natural gas power plants, which are obviously not sustainable, are to be given a green veneer, the trade in solar modules and green electricity is not included in the taxonomy criteria. They are considered not significant for sustainability and climate protection. This is absurd when one considers the goal of the EU taxonomy: to reward companies that align their investments with sustainability and to strengthen their competitiveness."

The EU taxonomy is intended to finance the transformation of the economy towards sustainability. However, in its current draft, it only covers parts of the value chain. Companies whose contributions to sustainability are currently not considered significant by the EU taxonomy risk being rated as less sustainable than they actually are. As a result, they may no longer be able to use green financing instruments—the steering tools of the EU taxonomy—in the future.This applies to many sectors and to trade in general. Prof. Klaus Josef Lutz adds:

"Who is supposed to bring all the sustainable products to the market if not the trade? With all the other requirements from Berlin or Brussels, the trade is also held accountable and its responsibility in terms of the environment, social impacts, or good corporate governance is called upon. You can't now say with the EU taxonomy that the trade doesn't make a substantial contribution to sustainability." 

The goal of the German coalition government to double the share of renewable energies in electricity supply to 80 percent by 2030 is thus seen as being hindered by the BayWa CEO: According to the coalition agreement, the installed capacity in Germany alone in the solar sector should increase from the current 59 gigawatts (GW) to 200 GW in 2030.

What does this mean?

Lutz is right. In the current discussion, "old energy carriers" are once again being focused on more than new alternatives. Especially with nuclear energy, this is a huge problem because the issue of final disposal remains unresolved and will massively worsen over the coming decades. On the other hand, the expansion of PV and wind power plants continues to be pushed far too sluggishly.