The EU's General Court has partially annulled the European Commission's shipping criteria under the sustainable finance Taxonomy, ruling on 30 September 2026 that Brussels acted unlawfully by failing to set any quantifiable threshold for methane slippage emissions from LNG-powered ships.

The judgment forces the Commission to fix a numeric limit on methane leakage from gas-fuelled vessels before they can qualify as green investments. It leaves the aviation criteria untouched.

The case dates to August 2024, when a coalition of NGOs — Dryade, Fossielvrij NL and Protect our Winters Austria, backed by legal experts Opportunity Green and CLAW and more than 44,000 citizens — challenged the Commission's rejection of a request for internal review of the November 2023 Taxonomy amendments that brought aviation and shipping into the scheme.

What does the ruling change?

In practice, the Commission must now define a measurable ceiling for methane slippage. That matters for any carrier or investor banking on LNG-fuelled tonnage carrying the sustainable label. Methane, the primary component of fossil LNG, is roughly 82.5 times more potent than CO2 over a 20-year horizon, and unburned methane leaks across the LNG lifecycle.

The court also confirmed a principle with wider reach: the Commission's discretion in setting taxonomy criteria is not unlimited. Opportunity Green called the win remarkable, noting internal review applications of this kind have historically failed before the General Court.

David Kay, Legal Director at Opportunity Green, said: "We welcome the Court's finding that part of the shipping Taxonomy criteria is unlawful, risking letting LNG-powered ships producing significant quantities of the super-pollutant methane be considered 'green' investments. This ruling is a crucial confirmation that the European Commission's discretion is not a blank cheque and remains strictly bound by the rules of the Taxonomy Regulation."

Why did the NGOs sue?

The Taxonomy, adopted in 2020, is the EU's classification system for environmentally sustainable investment, steering both private and public money. Since November 2023, ships and planes running on fossil fuels can be labelled sustainable if they meet criteria the coalition argues are set so low that conventional assets pass.

The stakes are large. According to a CE Delft report summarised in an Opportunity Green briefing dated September 2026, more than half of European airlines' capital expenditure for 2025 was classified as Taxonomy-aligned — almost entirely transitional spending on new fossil-fuel aircraft and maintenance, with only a tiny fraction going to genuinely sustainable activities. Aviation was the only outlier of 115 sectors examined with such a high share of Taxonomy-aligned transitional expenditure. For a sector projected to represent 90% of EU transport emissions by 2050, the NGOs argue the taxonomy is overly permissive.

What survives the ruling?

The court rejected none of the aviation criteria and granted the Commission wide discretion to set them as it sees fit. That leaves the coalition's core concern unresolved: fossil-fuelled aircraft and ships can still be labelled sustainable investments.

Boris Schellekens of Fossielvrij NL said: "The fact that methane slippage must now be quantified still gives the green light to label an entirely new fleet of cruise ships and airplanes as green, even though they will be fossil-fuelled for another 30 years. The court has thrown the ball back to the Commission, by saying that it is up to 'the Commission to determine the appropriate level of protection for society'."

He urged EU climate Commissioner Wopke Hoekstra to reconsider the taxonomy so it fulfils its purpose of driving the green transition through financial flows.

What comes next?

Either party may appeal to the Court of Justice within two months, limited to points of law. The coalition says it will study the judgment before deciding.

Two further developments will shape the trajectory. First, a separate General Court ruling found the exclusion of private jets from the Taxonomy insufficiently evidenced, opening the door for private jet manufacturing to become Taxonomy-compliant. Second, the Commission plans to publish revised, "simplified" criteria by the end of December — and the current draft extends the period during which fossil-fuel ships and planes may qualify, aggravating carbon lock-in risks.

The NGOs want future criteria limited to electricity- and e-fuels-powered aircraft, exclusion of all fossil-fuel vessels including LNG, and lifecycle accounting for both CO2 and non-CO2 impacts such as contrails, NOx and methane slippage. Until the Commission sets the methane threshold and publishes the December criteria, the green status of LNG tonnage and new fossil aircraft hangs in the balance.