ChemTax
EU Taxonomy and Transition Pathway of the European Chemical Industry – Unlocking financial resources for safer, more sustainable and circular substances and chemical processes
Project overview
This transdisciplinary research project addresses the European Commission’s pivotal challenge in aligning the EU Taxonomy with the European Green Deal objectives - particularly the transition toward a “clean and circular economy” and the “zero-pollution ambition for a toxic-free environment”. The EU Taxonomy, as a unified classification system for environmentally sustainable economic activities, is designed to bridge the real economy and financial markets, thereby aiming for capital reallocation toward the green transition.
While the Chemical Strategy for Sustainability underscores the chemical industry’s instrumental role in this transition, only a limited fraction of chemical manufacturing activities are deemed environmentally sustainable under the current Taxonomy-framework. Notably, the adopted Environmental Delegated Act—encompassing the environmental goals Pollution Prevention and Control and Transition to a Circular Economy — lacks specific, measurable criteria for the design and production of safer, more sustainable substances and chemical processes. As a result, progressive chemical manufacturers are unable to demonstrate their material contribution to these objectives through Taxonomy-reporting, restricting their access to ‘green’ capital. Generally, the chemical industry reports disproportionately low shares of taxonomy-eligible and -aligned activities relative to other sectors. Coupled with usability challenges, the majority of chemical manufacturers perceives the Taxonomy as a misaligned instrument.
Beyond highlighting the sector-specific limitations within the current architecture, this study proposes design options, co-developed with Taxonomy-stakeholders, to redirect financial flows toward a "safer, zero-pollution, and circular chemical industry" - as articulated in the European Commission’s Transition Pathway for the Chemical Industry. As a first step, the research advocates for the integration of robust and sector-specific activities and criteria for pollution prevention and circularity into the Delegated Acts, thereby enhancing the eligibility of chemical manufacturing activities. Without an adequate share of eligible activities, chemical manufacturers cannot realise the Taxonomy’s potential and remain hesitant to leverage the instrument to attract ‘green’ capital.
Publications
EU taxonomy and chemical manufacturing: How implementation gaps undermine investment in circular, safer and more sustainable substances and chemical processes
April 2026
Journal: Current Research in Green and Sustainable Chemistry
DOI: 10.1016/j.crgsc.2026.100517
License: CC BY 4.0
Highlights:
Chemcial manufacturers at large do not utilise the EU Taxonomy.
Taxonomy-eligible activities insufficiently cover chemcial manufacturing (NACE C20).
Taxonomy-KPI of chemical manufacturers lack significance for investors and lenders.
Revisions are required to incentivise safe and circular chemical industry transition.
Need for Taxonomy-eligible C20-activities targetting pollution prevention and circularity.
Abstract:
The European Commission faces a critical challenge in aligning the EU Taxonomy for sustainable activities with the pillars of the European Green Deal, particularly the “zero-pollution ambition for a toxic-free environment” and the “mobilising industry for a clean and circular economy”. Functioning as the unified classification system for environmentally sustainable economic activities, the Taxonomy is designed to bridge real and financial economies, directing capital toward the economic transition. Despite the Chemical Strategy for Sustainability underscoring the chemical industry's essential role in the transition, only a fraction of the activities related to manufacturing of chemicals is covered by the Taxonomy. Particularly, the adopted Environmental Delegated Regulation, comprising the environmental goals Pollution Prevention and Control and Transition to a Circular Economy, lacks activities and specific, measurable criteria for design and production of safer and more sustainable substances and chemical processes. Consequently, progressive chemical manufacturers cannot demonstrate their substantial contribution to these environmental goals through Taxonomy reporting, limiting their access to green capital. Coupled with usability challenges and a low percentage of Taxonomy-eligible and -aligned activities compared to other industries, the majority of chemical manufacturers perceives the Taxonomy as a misaligned instrument for funding Green Chemistry innovation. This transdisciplinary research highlights the systemic bottlenecks. It argues: Without targeted revisions of the delegated regulations and enhanced integration of suitable pollution prevention and circularity metrics, the Taxonomy will remain ineffective in steering financial flows toward a “safer, zero-pollution, and circular chemical industry” - as envisioned by the European Commission's Transition Pathway for the Chemical Industry.
Participation in public consultations
1. Feedback on Taxonomy Delegated Acts – amendments to make reporting simpler and more cost-effective for companies in March 2025.
2. Feedback on EU Taxonomy - Review of Climate and Environmental Delegated Acts in December 2025.
3. Feedback on EU Taxonomy - Review of Climate and Environmental Delegated Acts in April 2026.
Project lead
Aaron Rittmeier (aaron.rittmeier@h-da.de)
Collaborating institutions
WWF Epo, ChemSec, Independent Science Based Taxonomy (ISBT)
Funding
This work is supported by the PhD funding programme of the University of Applied Sciences in Darmstadt.
Duration
2024-2027