Plan to limit oil-and-gas investment from green-finance eligibility could raise ire of environmental groups, energy companies
projects from being classified as green, and award that designation only in a limited and qualified way to projects to reduce pollution from existing fossil-fuel production.
SFAC chair Kathy Bardswick declined to comment on the contents of the taxonomy roadmap before its formal release. The document’s authenticity was confirmed by two other sources who were engaged in its development, whom The Globe and Mail is not identifying because they were not authorized to speak publicly about it.
The more straightforward green label would be reserved for projects that have zero or low emissions both in their own operations and from the consumption of their products, and that are projected to be in high demand during the shift to a lower-carbon economy. Among the examples offered by the SFAC are green hydrogen projects, electric-vehicle manufacturing with low-emissions supply chains, clean-electricity infrastructure and tree-planting in areas where forests did not previously grow.
The proposed requirements add up to an attempt to avoid giving any stamp of approval to investments that could either expand oil-and-gas production beyond existing levels, contribute to the lock-in of oil-and-gas infrastructure beyond the point it would otherwise cease to be viable, or create stranded assets.
One of those involves what is considered an existing fossil-fuel extraction site for which investment to minimize emissions could be eligible. The document suggests that beyond just sites already producing oil and gas, under-development sites could qualify if they have been granted production licences and significant capital expenditures have already been allocated.
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