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. • 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 cirularity.
Rittmeier et al. (Wed,) studied this question.