The EU court supports the green finance designation for biomass energy investments.

The EU's General Court has rejected a legal challenge aimed at reversing the European Commission's decision to categorize forest biomass energy as a sustainable investment within the bloc's green finance framework.

The court's decision, issued on 18 March 2026 in Case T-575/22 (Robin Wood and Others v Commission), dismissed an attempt to annul a Commission ruling from July 2022, which had turned down a request for an internal review of Delegated Regulation (EU) 2021/2139.

This regulation set the technical criteria for determining which forestry management and bioenergy practices can be regarded as environmentally sustainable.

The plaintiffs, including Robin Wood and six other environmental NGOs, contended that the Commission's designation of forestry and forest bioenergy as sustainable was illegal and violated EU legislation, particularly the Taxonomy Regulation.

The court fully supported the Commission, concluding that it was not at fault for not tightening the taxonomy criteria beyond what EU law mandates.

This ruling came after a related decision in September 2025, where the General Court similarly rejected a challenge from the environmental NGO ClientEarth. That case marked the end of a legal dispute that began in 2022, with ClientEarth claiming the Commission was breaching its own regulations by classifying the burning of woody biomass for energy as sustainable within the taxonomy. The court dismissed all of ClientEarth's claims.

These rulings affirm that the Commission possesses significant discretion in establishing and implementing the taxonomy's technical criteria, allowing politically sensitive sectors like bioenergy to be recognized as aligned with the taxonomy as long as specific conditions are satisfied.

The EU considers bioenergy renewable because plants and trees absorb CO₂ during their growth, which partially offsets emissions generated by combustion. Additionally, biomass used in the EU must meet sustainability criteria aimed at protecting ancient forests and natural habitats.

Critics maintain that this carbon accounting method exaggerates the climate advantages of burning wood and warn that the taxonomy label may lead investments toward activities that increase rather than decrease short-term emissions. Further appeals to the Court of Justice of the EU are anticipated following these rulings.