Classification overlooks telecom networks (for now)

We started the series in July. EC Technical ReportIt is in the White Paper that we present Telefónica’s contribution to public participation. As a result of this consultation, the Commission will submit a legislative proposal. Digital Networks ActIt will determine the future of the European Union and the telecommunications sector over the next decade through a new regulatory framework.

First The post analyzed the proposed future for the telecommunications industry. second The article identified new challenges facing the new Commission. third The post touched on Internet instability. fourth explained the challenges of post access regulation. fifth It was then investigated whether the regulatory model limits innovation in the telecommunications sector. In this sixth post, we will explain the importance of the Taxonomy to mobilize investments in more efficient next-generation networks.

The need to mobilize investment in networks is widely recognized in Europe. In 2023, the European Commission published a study commissioned to WIK-Consult; This study revealed a €200 billion investment gap that the European Union must address to achieve the connectivity targets set out in its charter. Digital Decade. This figure, which in our opinion is a conservative estimate, was discussed in Mario Draghi’s report.”The Future of European Competitiveness“, emphasized the need to increase investments in the installation of new generation telecommunication networks.

In the same vein, in his report “Much More Than a Market” Enrico Letta recognizes the importance of “promoting the investments necessary to close the growing connectivity investment gap.” He also underlined the role of networks in sustainability, stating that “a healthy and secure electronic communications sector is vital for the Union’s green transition (innovation and resilience).”

More recently, in November hearingsHenna Virkkunen, Commissioner for Technology Sovereignty, Security and Democracy, touched upon the expected increase in energy consumption in the coming years due to digitalization and new technologies: artificial intelligenceHe emphasizes the importance of combining digital transformation with green goals.

The need to mobilize investments and align digital and green goals makes the inclusion of telecommunications networks in the Taxonomy an important tool for moving towards a more sustainable and competitive telecommunications infrastructure. It should feature prominently in legislative initiatives to be proposed by the European Commission next year.

Proposal to Include a New Telecommunication Network Activity in the Taxonomy

ours previous postWe highlighted the energy efficiency of next-generation network installations, as well as Telefónica’s performance over the years in green finance to accelerate decarbonisation. We also explained the role that the EU Taxonomy will play in defining the European model for sustainable finance. With this scenario in mind, the mobile industry has proposed creating a new telecommunications network activity in the upcoming review of the Taxonomy’s Climate Era Act. This initiative aims to direct investments towards the deployment of more efficient networks, supporting the European Union’s dual objectives of achieving climate neutrality and advancing the Digital Decade agenda.

The classification currently includes other networks as eligible activities, such as activity 4.9 “Transmission and distribution of electricity”. The logic of this is that electricity networks enable the flow of renewable energy, bringing it from the point of production to the point of consumption and contributing to the reduction of greenhouse gas emissions. The logic of incorporating telecommunications networks is not very different: they enable more efficient information flows that allow operators, businesses and consumers to reduce emissions.

Code of Conduct for Telecommunications Networks as Technical Criteria for New Activity

To include this new activity in the Taxonomy, it is important to establish a technical criterion that will ensure that deployed telecommunications networks contribute to the emissions reduction target.

The European Commission is currently working on a Code of Conduct that could form the basis for the development of technical criteria for telecommunications networks. However, given that these Rules cannot be finalized before the end of the period, Climate Mandate Act We propose to take urgent action during the review period by adopting a technical benchmark based on robust indicators used by industry to evaluate the efficiency of networks. The development of the indicators was the motivation for the report published by the European Commission Joint Research Center together with DG Connect in 2024. The report outlines a set of science-based KPIs for measuring the environmental impacts of networks and is the starting point for the development of a new activity in a Taxonomy of electronic communication networks.