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EU Taxonomy Compliance Framework for Oil & Gas Companies

Updated for 2025 Reporting Requirements

Key Changes in 2025 Taxonomy Regulation

EU Taxonomy Adoption Timeline

2020

Taxonomy Regulation Adopted

Initial framework established with climate change mitigation and adaptation objectives

2022

First Delegated Act Published

Covering the first two environmental objectives (climate change mitigation/adaptation)

2023

Full Technical Screening Criteria

All six environmental objectives are covered, including transitional criteria for fossil fuels

2024

Mandatory Reporting Begins

Large public interest entities (>500 employees) must disclose Taxonomy alignment

2025

Expanded Scope Implementation

All large companies meeting CSRD thresholds must report Taxonomy alignment

2026

Sector-Specific Requirements

Oil & gas companies must disclose detailed transition plans with Taxonomy alignment

EU Taxonomy Framework Structure

Component Description Relevance to Oil & Gas
6 Environmental Objectives Climate change mitigation, adaptation, water, circular economy, pollution, biodiversity Focus on first two objectives with transitional criteria
Technical Screening Criteria Detailed requirements for economic activities to qualify as "green" Specific criteria for extraction, refining, and transitional activities
DNSH Requirements Do No Significant Harm to other environmental objectives Critical for fossil fuel activities to qualify as transitional
Minimum Safeguards Alignment with OECD Guidelines and UN Guiding Principles Human rights and social considerations in operations

Oil & Gas Company Alignment Roadmap

Phase 1

Gap Assessment (Months 1-3)

  • Map all economic activities against Taxonomy criteria
  • Identify potentially eligible transitional activities
  • Assess DNSH compliance across operations
Phase 2

Data Collection (Months 4-6)

  • Establish KPIs for eligible activities (CapEx, OpEx, turnover)
  • Implement systems to track Taxonomy-aligned investments
  • Collect evidence for DNSH compliance
Phase 3

Implementation (Months 7-9)

  • Develop transition plans for non-aligned activities
  • Integrate Taxonomy reporting with financial systems
  • Prepare assurance processes for disclosures
Phase 4

Reporting (Months 10-12)

  • Produce first Taxonomy-aligned financial statement
  • Disclose alignment percentages (CapEx, OpEx, turnover)
  • Publish transition plan with measurable targets

Key Technical Screening Criteria for Oil & Gas

Upstream Extraction

Refining

Transitional Activities

Challenges for Oil Companies

Sources: EU Taxonomy Regulation (2020/852), Delegated Acts (2021-2023), EBA Guidelines (2024), Industry Best Practices

Note: This framework reflects requirements as of June 2025. Companies should monitor for upcoming revisions to technical screening criteria.