The EU first launched its sustainable finance action plan in 2018. This required a way to determine what is, and what is not, sustainable economic activity, which is the 'taxonomy' element of the sustainable finance taxonomy. The overall objective is to define the concept of ‘sustainable investments’ to channel capital flows towards those type of investments. 

This EU framework is intended to serve two purposes: Member States authorities can use it when
setting national legislation to promote sustainable investment (e.g. labelling schemes, green bond schemes, etc.), and financial actors can use the criteria to determine the environmental sustainability of an investment.

EUROFER welcomes mobilised investment in the EU which helps achieve the Paris Agreement and Europe’s 2030 & 2050 climate targets. Achieving these goals will require massive transformative investments in R&D and in the testing and scaling up of new technologies - all in a relatively short space of time.

By 2050, the steel industry has the ambition, under the right circumstances, to have shifted from high dependence on fossil energy and raw materials towards being a low-carbon energy-based sector integrally part of the circular economy. This transition will require access to sustainable finance.