Definition
The EU Taxonomy is a common European classification system defining which economic activities can be considered sustainable. It covers six environmental objectives: climate change adaptation, climate change mitigation, water, circular economy, pollution, and biodiversity. Activities are classified as 'taxonomy-aligned' based on technical screening criteria and the Do No Significant Harm (DNSH) principle. For the energy sector, hydropowerElectricity produced from the potential energy of falling water - Norway's dominant energy source (~90% of production) with a unique ability to ramp up and down quickly., wind power, and nuclear powerElectricity generated by nuclear fission of uranium or plutonium - emission-free during operation, stable baseload, and an increasingly prominent part of the European energy debate. are subject to specific criteria. The Taxonomy is used by banks and investors to channel capital into green projects.