European Court of Justice Rules on Taxonomy Criteria
On June 24, 2026, the General Court of the European Union delivered its judgment in Case T-77/24, Dassault Aviation v European Commission. The applicant, French aerospace group Dassault Aviation, was challenging an amendment to Delegated Regulation (EU) 2021/2139 (or "Climate Delegated Act") adopted by Commission Delegated Regulation (EU) 2023/2485. The new amendment defined technical criteria for activities described as "manufacture, repair, maintenance, overhaul, retrofitting, design, repurposing and upgrade of aircraft and aircraft parts and equipment" to qualify as contributing substantially to climate change mitigation. However, it excluded aircraft manufactured for private or commercial business aviation from qualifying. As a consequence, the manufacturing of private or commercial business planes would be considered as non-aligned with the taxonomy and could not benefit from better financial terms granted by banks and investors to taxonomy-aligned activities.
The General Court annulled the challenged section due to a "manifest error of assessment" in the European Commission's reasoning. The Commission had excluded business aviation manufacturing based on the CO₂ footprint per passenger-kilometre of business aircraft compared with other transport modes. The General Court held this approach was legally flawed on multiple grounds. First, the Commission could not assume that other modes of transport such as rail or cars necessarily constitute lower carbon alternatives to business aircraft, since such transportation modes do not offer the same flexibility and speed as private flights. Second, the criteria of CO₂ per passenger-kilometre relates to the operation of aircraft rather than their manufacture. Also, the General Court considered that the Commission's failure to account for the capacity of the private aircraft to operate on sustainable aviation fuels, even though such option was offered to commercial aircrafts, was "manifestly arbitrary."
The General Court's decision annulled the entire section of Commission Delegated Regulation (EU) 2023/2485 on the manufacture of aircraft, not just the provisions calling for an exclusion of private or commercial business aviation.
This decision carries significant implications for the interpretation and implementation of the Climate Delegated Act. It establishes that when adopting technical screening criteria by delegated act, the Commission must remain strictly within the framework set by the Taxonomy Regulation and cannot rely on assessment criteria extraneous to the economic activity considered for classification. Specifically, taxonomy classifications for manufacturing activities must be assessed by reference to the characteristics and decarbonization potential, with respect to climate change, of the manufacturing activity itself, rather than by downstream activities, unless the Taxonomy Regulation expressly supports that approach.
More broadly, the ruling recognizes that taxonomy-alignment status can affect sustainability reporting and financing conditions sufficiently to confer standing on affected companies, thereby opening the door to further judicial challenges to taxonomy classifications by industry participants.
