By Kate Abnett
BRUSSELS (Reuters) - The European Commission has proposed labelling certain investments in aviation as green, after a months-long row over whether to add the sector to the EU's list of sustainable investments.
The Commission said the rules should encourage the aviation sector to cut greenhouse emissions in the near term, but its proposal to label certain planes as green immediately drew criticism from environmental campaigners.
The decision had also split opinion inside the Commission, with some officials pushing to add aviation investments if they meet strict environmental standards, and others opposed to giving a climate-friendly badge to a sector with a high carbon footprint.
In a proposal published on Wednesday, the Commission said certain investments in aviation leasing, manufacturing, passenger and freight flights would be added to the taxonomy, and classed as helping to fight climate change.
The rules set detailed environmental criteria that each economic activity must meet.
For example, manufacturers can win a green label either for producing aircraft with zero tailpipe CO2 emissions, or aircraft with lower CO2 emissions than International Civil Aviation Organisation limits for new planes. From 2028, such aircraft must also be able to run on sustainable fuels.
The Commission said the lack of zero-emissions planes or large volumes of sustainable aviation fuels available today meant the sector needed rules to incentivise the switch to more efficient planes, to cut emissions in the near term before breakthrough CO2-free technologies emerge.
Climate campaigners criticised the rules for allowing planes running on fossil fuels to be labelled as climate friendly.
"If planes running on oil and ships running on gas are now considered sustainable, there is little hope for the taxonomy," said Faig Abbasov of campaign group Transport & Environment.
Transport & Environment had co-led a group of EU advisers that recommended giving a green label to certain aviation investments last year. But it has since criticised the plans for failing to cut CO2 enough.
The European Union Taxonomy is being developed to classify which parts of the economy may be marketed as environmentally sustainable investments, with the aim of directing funds towards sectors that contribute most to climate change goals.
EU countries and lawmakers could reject the rules, but doing so requires majority support - a relatively high threshold that some EU officials say is unlikely to be met.
The dispute over aviation comes after another row over the taxonomy last year, when the EU labelled some gas and nuclear investments green. The Commission is facing two lawsuits over that decision.