Technical Screening Criteria
Technical Screening Criteria (TSC) are the specific thresholds and performance standards an economic activity must meet to qualify as making a Substantial Contribution to an EU Taxonomy environmental objective. Understanding TSC is the core technical challenge of Taxonomy alignment assessment.
Technical Screening Criteria (TSC) are the specific thresholds and performance standards an economic activity must meet to qualify as making a Substantial Contribution to an EU Taxonomy environmental objective. For each economic activity listed in the EU Taxonomy, the Technical Screening Criteria define the minimum performance standard required to claim Substantial Contribution to a specific environmental objective.
What Technical Screening Criteria are
For each economic activity listed in the EU Taxonomy, the Technical Screening Criteria define the minimum performance standard required to claim Substantial Contribution to a specific environmental objective. Meeting the TSC is not optional — it is the quantitative test that separates taxonomy-eligible from taxonomy-aligned activities.
TSC are set at the level of the economic activity, not the company. The same TSC apply regardless of company size, sector, or geography — though some TSC reference local regulatory standards as the baseline.
For Climate Change Mitigation (Objective 1): TSC typically specify maximum GHG emission thresholds — e.g. electricity generation must emit below 100g CO2e/kWh to qualify. For manufacturing activities, TSC specify best available technology (BAT) performance levels. For buildings, TSC specify energy performance certificate ratings or energy consumption thresholds.
How TSC interact with DNSH
Every taxonomy-aligned activity must meet TSC for Substantial Contribution to one objective AND pass the Do No Significant Harm (DNSH) test for all five other objectives.
DNSH criteria are activity-specific and set separately from the Substantial Contribution TSC. For example, a solar power installation that meets the Climate Mitigation TSC (Substantial Contribution) must also demonstrate it does not significantly harm: climate adaptation (site-level physical risk assessment), water (no significant water use impact), circular economy (waste from decommissioned panels managed), pollution (no significant soil or water contamination), and biodiversity (no siting in protected areas without mitigation).
In practice, DNSH assessment is often the harder test — many activities that easily meet the Substantial Contribution TSC fail on one or more DNSH criteria. Biodiversity DNSH (no siting in Natura 2000 or equivalent areas) is the most commonly failed criterion for renewable energy projects.
Sector coverage and gaps in TSC
The EU Taxonomy TSC are most developed for sectors with the largest climate impact: energy (electricity generation, heat production), transport (electric vehicles, rail, aviation), buildings (construction, renovation), manufacturing (steel, cement, aluminium, chemicals), and water (wastewater treatment, water supply).
Gaps remain significant: financial services activities (banking, insurance) have no Substantial Contribution TSC for their core lending and underwriting activities — only investment in sustainable activities is covered. Professional services, technology, and most service sector activities are not listed in the Taxonomy at all.
For companies in unlisted sectors: your taxonomy-eligible revenue is likely zero or very low. Disclose this clearly — a manufacturing company buying services from a law firm cannot claim the legal fees as taxonomy-eligible CapEx. Focus your alignment calculation on capital expenditure in listed activities (renewable energy installation, EV fleet, building renovation).
Frequently asked questions
Where do I find the Technical Screening Criteria for my sector?
The TSC are set out in EU Delegated Regulations — primarily 2021/2139 (Climate Mitigation and Adaptation) and 2023/2485 (the four environmental objectives). These are available on EUR-Lex. The EU Taxonomy Compass (taxonomy.ec.europa.eu) provides a searchable interface — search by activity name or NACE code to find applicable TSC.
What if our activity is listed but the TSC are very difficult to meet?
Disclose as eligible but not aligned, with a brief explanation of the gap. Many companies have eligible activities that fall short of TSC — particularly for climate adaptation (physical risk assessment requirement) and biodiversity DNSH. A transition plan showing how you will meet TSC in future strengthens the disclosure.
Do TSC change over time?
Yes — the European Commission reviews and updates TSC periodically. The 2023 Delegated Act amendments updated several climate mitigation TSC. Always use the TSC in force during your reporting year — not the version current at the time of publication. Check EUR-Lex for the applicable version.