EU taxonomy


In order to achieve the objectives of the Paris Agreement by 2050, the European Union drew up the EU Action Plan in 2018 as part of the Green Deal to ensure that the European economy becomes more sustainable. The three main elements of the EU Action Plan are:

  • Redirect capital flows toward a more sustainable economy;

  • Make sustainability a permanent aspect of risk management;

  • Encourage transparency and long-term thinking.

The next step was the adoption of the EU taxonomy, a classification system that shows whether cash flows support ecologically sustainable business activities. Under the EU Taxonomy Regulation (EU) 2020/852, companies report three financial indicators regarding ecologically sustainable business activities: turnover, CapEx and OpEx.

The EU taxonomy serves six environmental objectives:

  • Climate change mitigation;

  • Climate change adaptation;

  • Sustainable use and protection of water and marine resources;

  • Transition to a circular economy;

  • Pollution prevention and control;

  • Protection and restoration of biodiversity and ecosystems.

Alliander’s operations have to be assessed against the EU taxonomy to establish whether they qualify as climate-related business activities on the basis of the definition (i.e. are eligible). The assessment of the climate-related business activities involves determining whether they meet the criteria for substantial contribution to the environmental objectives and also meet the criteria for doing no significant harm in relation to the other five environmental objectives. Whether Alliander meets the minimum safeguards with regard to human rights, corruption, tax and fair competition will be determined at the corporate level. If the aforementioned conditions are met, these business activities qualify as ecologically sustainable (aligned) under the EU taxonomy.

Business activities that are eligible under the EU taxonomy

The EU taxonomy (Climate Delegated Act 2021/2139) defines which business activities are climate-related and thus qualify as eligible under the taxonomy. A number of Alliander’s business activities fall under the ‘climate change mitigation’ environmental objective: ‘Transmission and distribution of electricity’ (code 4.9) and ‘District heating/cooling distribution’ (code 4.15) have been designated as climate-related. The business activities ‘Transport by motorcycles, passenger cars and light commercial vehicles’ (code 6.5) and ‘Acquisition and ownership of buildings’ (code 7.7) are also reported on; although they do not generate revenue, they do contribute to Alliander’s sustainable objectives as supporting business operations. Alliander has no business activities that focus on the four other environmental objectives stipulated by the Environmental Delegated Act 2023/2486. The climate-related business activities were therefore assessed on the basis of the ‘climate change mitigation’ objective. They do not overlap with other business activities, so there is no duplication in the reported figures.

Ecologically sustainable business activities

Transmission and distribution of electricity is an ecologically sustainable business activity under the EU taxonomy. The infrastructure for distributing electricity is part of the European electricity network and so this facilitative business operation meets the most important criterion relating to substantial contribution. However, direct connections between the network and third-party production units with emissions exceeding 100g of CO2/kWh do not meet the requirements. Energy meters that are not smart meters are likewise excluded. The financial value of these activities is therefore included in a separate line. Electricity distribution meets the ‘Do No Significant Harm’ (DNSH) criteria for the other environmental objectives; a climate impact assessment has been carried out within the context of climate adaptation and the criteria relating to circularity, pollution prevention and biodiversity are satisfied.

Minimum safeguards

Alliander set up a process in 2023 to integrate due diligence in the procurement domain. We started raising awareness within Procurement and updating the risk analysis with regard to the violation of workers’ and human rights in the supply chain. Further to this risk assessment, the measures will also be redetermined. The monitoring of human rights in the supply chain was expanded in 2023 by conducting more audits at suppliers. We are communicating with fellow network operators and with suppliers in the chain about the introduction of the CSRD and the actions required to gain a better insight into human rights in the supply chain and to safeguard them. For components that are made up of many parts, it can be difficult to obtain a clear picture of the entire supply chain. On the other hand, our suppliers are often major European businesses that are also busy implementing human rights legislation. The introduction of HRDD in the supply chain is a continuous process to organise monitoring of human rights in accordance with international legislation throughout the supply chain and implement measures to correct violations where required. The implementation of awareness, risk control, monitoring, correction mechanisms and supply chain management ensures that Alliander complies with its due diligence obligation in the field of workers’ and human rights, as required under the minimum safeguards of the EU taxonomy.

Climate-related but ecologically non-sustainable business activities

Heat distribution complies with the substantial contribution criteria (more than 50% of the distributed heat is residual heat) but not with the DNSH criteria; for instance, a climate impact assessment specifically for the district heating networks has not been carried out. It is also not possible to demonstrate that the DNSH criteria for the marine environmental objective or for pollution prevention have been met.

As regards transport by motorcycle, passenger cars and light commercial vehicles, only some of the passenger cars meet the emission requirement of no more than 50g CO2/km as set in the substantial contribution criteria. The lease companies do not yet have the information required to determine whether these vehicles also meet the DNSH criteria for the other environmental objectives.

As regards acquisition and ownership of buildings, we have determined the locations at which investments have been made in new-build or renovation. These projects meet the substantial contribution criteria as regards energy efficiency. No climate impact assessment has been performed for this business operation in 2023 to determine which measures have to be taken for climate adaptation, and no data is available for the other environmental objectives to determine whether they meet the DNSH criteria.

Due to the fact that the aforementioned business activities do not meet the DNSH criteria, they cannot be designated as ecologically sustainable.

Business activities that are not eligible under the EU taxonomy

Natural gas distribution and other (supporting) operations are not considered to be climate-related business activities under the EU taxonomy and are therefore not eligible for the EU taxonomy.

Financial information

The financial figures are presented below in the table structure stipulated by Delegated Regulation (EU) 2023/2486, with the comparative figures for last year included in a separate table.

The turnover under the EU taxonomy (Disclosure Delegated Act 2021/4987) is consistent with IFRS reporting standards and is therefore equal to the net revenue as included in the financial statements under note 21. The turnover is allocated to Alliander’s various business operations on the basis of sales records. The table shows how each operation is classified under the EU taxonomy.

The CapEx relates to investments in property, plant and equipment (note 3), investments in intangible assets (note 4) and additions to right-of-use non-current assets (note 3). The investments associated with the assets held for sale are not part of this CapEx. The portion of the total investments that concerns climate-related business activities was determined by identifying the economic activity to which each asset group is related and assessing whether this activity is mentioned in the EU taxonomy.

The OpEx under the EU taxonomy is defined as the non-capitalised direct costs for preserving the assets. Based on this definition, Alliander has only classified maintenance and outage costs as operating expenses under the EU taxonomy. We have determined which part of these maintenance and outage costs is associated with climate-related business activities based on the underlying work order and project records.