DE BayWa Klaus Josef Lutz

Klaus Josef Lutz, BayWa

The head of one of Europe’s largest fresh produce companies has heavily criticised an EU project that aims to grade commercial and industrial activities according to their environmental impact.

Known as the Taxonomy Regulation, the system came into force in July 2020 and revolves around a classification system that establishes a list of environmentally sustainable economic activities.

According to BayWa chief executive Klaus Josef Lutz, the system is set to have an “absurd” impact, because he said it threatened to slow down efforts to switch to clean energy, and therefore delay a targeted reversal of recent adverse climate change.

'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 worse off than less sustainable business models as a result of the EU taxonomy,” Lutz commented.

“While nuclear and natural gas power plants, which are obviously not sustainable, are to be given a green cloak, the trade in solar modules and green electricity are not included in the taxonomy criteria. They are thus not considered significant for sustainability and climate protection.”

The aim of the EU taxonomy is to provide companies, investors and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable.

For Lutz, the policy’s current draft excludes companies whose contribution to sustainability is not currently assessed, which means they may no longer be able to access the taxonomy’s green financing instruments.

'Who is supposed to bring all the sustainable products to the market if not the trade?” he asked. “With all other requirements from Berlin or Brussels, the trade is also taken to task with conditions and appeals are made to its responsibility in terms of the environment, social consequences or good corporate governance. You can't say now with the EU taxonomy that trade is not making a substantial contribution to sustainability.”

The taxonomy is due to be updated later in 2022. In the meantime, Lutz said he believed it would make it more difficult for the German government to achieve its goal of doubling the share of renewable energies in the country’s electricity supply to 80 per cent by 2030.