Eligibility is the scoping test: is the economic activity described in a Taxonomy delegated act? Alignment is the sustainability test: does that eligible activity meet the Article 3 conditions and the applicable ?
This FAQ helps keep Article 8 classifications, key performance indicators (KPIs), evidence, and public wording from treating eligible activity as automatically aligned.
Under the EU Taxonomy, eligibility and alignment are sequential but different findings. An activity can be Taxonomy-eligible because it is described in delegated acts, while still not be Taxonomy-aligned unless it satisfies substantial contribution, do no significant harm (DNSH), minimum safeguards, and technical screening requirements.
Side-by-side comparison
EU Taxonomy eligibility vs alignment
Compare the two findings teams need for Article 8 reporting: whether an activity is covered by the Taxonomy delegated acts, and whether it qualifies as environmentally sustainable under Article 3.
Eligibility asks whether the economic activity is described in the Taxonomy delegated acts and should be treated as eligible or non-eligible in the relevant Article 8 disclosure.
Second framework
Alignment
Alignment asks whether an eligible activity also meets the Article 3 conditions, including substantial contribution, DNSH, minimum safeguards, and .
The FAQ identifies Article 1(5) of the Disclosures Delegated Act as the basis for defining eligible economic activity by reference to delegated-act descriptions.
defines an eligible economic activity
Alignment starts from that mapped activity and tests whether it qualifies as environmentally sustainable under Article 3 and the applicable activity criteria.
Article 3 gives the conditions for an economic activity to qualify as environmentally sustainable.
qualify as environmentally sustainable
Keep one record for the activity mapping and a second record for the alignment result; an eligible activity can remain eligible even when the alignment test fails or is incomplete.
Eligibility usually needs the sustainability, finance, and business owner who can identify the activity description, reporting boundary, and KPI line affected.
Article 3 requires more than coverage: it requires substantial contribution, DNSH, minimum safeguards, and technical screening criteria.
minimum safeguards
Do not leave alignment to the reporting team alone; they need source evidence from business, finance, legal, environmental, human-rights, and technical control owners where those facts are relevant.
Eligibility is triggered when an in-scope undertaking prepares Article 8 disclosure and must classify activities, assets, or exposures as Taxonomy-eligible or non-eligible.
The FAQ states that all large undertakings needed to report eligible and non-eligible activity proportions during the initial Article 8 reporting phase.
eligible and non-eligible
Alignment assessment is required where the applicable Article 8 reporting route requires aligned KPIs. It is also needed to support a voluntary claim that an eligible activity is Taxonomy-aligned or environmentally sustainable.
The delegated act requires disclosure of Taxonomy-aligned activities and the environmental objectives to which they substantially contribute.
Taxonomy-aligned activities
Classify first, then apply the alignment assessment required by the reporting route. Record evidence gaps and any applicable assessment relief separately; insufficient data does not establish alignment.
The FAQ ties eligibility to delegated-act activity descriptions and says eligibility assessment is not dependent on accounting standards.
not dependent on the accounting standards
Alignment test: does that eligible activity make a substantial contribution, avoid significant harm to other objectives, meet minimum safeguards, and satisfy ?
Eligibility evidence is the activity mapping: delegated-act activity description, internal activity or exposure, reporting boundary, and KPI amount included or excluded.
The delegated act specifies KPI content, presentation, and methodology, which creates the record structure for activity and KPI evidence.
methodology to comply
Alignment evidence is the test file: , substantial contribution calculation, DNSH evidence, minimum safeguards conclusion, and allocation method where only part of an amount is aligned.
The notice requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities when an asset supports both aligned and non-aligned outputs.
based on verifiable evidence
Store eligibility and alignment evidence separately enough that reviewers can see why an amount moved from non-eligible to eligible, or from eligible to aligned.
Eligibility classification appears in Article 8 reporting when the undertaking discloses eligible and non-eligible activity or exposure proportions for the reporting period.
The FAQ describes the phased Article 8 timetable in which eligibility reporting preceded full alignment reporting for certain undertaking categories.
not required to assess
Alignment is disclosed only when the applicable Article 8 timetable and KPI methodology require or allow aligned activity reporting for the undertaking type and activity set.
The delegated act sets application and disclosure requirements for undertaking KPIs and Taxonomy-aligned activity reporting.
key performance indicators
Avoid reusing first-year eligibility conclusions as current alignment evidence; confirm the current delegated acts, reporting templates, and KPI methodology before publication.
The notice's CapEx allocation guidance shows that aligned KPI treatment depends on evidence and methodology, not only activity coverage.
accurate allocation
Build the evidence workflow so the eligibility inventory feeds the alignment test, but make the aligned KPI numerator depend on completed criteria evidence.
Article 3 supports the alignment state by listing the conditions for environmentally sustainable activity.
carried out in compliance
Use four visible states in Taxonomy reporting workpapers: non-eligible, eligible not aligned, aligned, and non-assessed non-material. Keep the reason and evidence for each state so coverage or non-assessment is not presented as proof of environmental sustainability.
The FAQ identifies Article 1(5) of the Disclosures Delegated Act as the basis for defining eligible economic activity by reference to delegated-act descriptions.
defines an eligible economic activity
Alignment
Alignment starts from that mapped activity and tests whether it qualifies as environmentally sustainable under Article 3 and the applicable activity criteria.
Article 3 gives the conditions for an economic activity to qualify as environmentally sustainable.
qualify as environmentally sustainable
Operational implication
Keep one record for the activity mapping and a second record for the alignment result; an eligible activity can remain eligible even when the alignment test fails or is incomplete.
The delegated act separates eligible/non-eligible disclosure from aligned activity disclosure in KPI templates and methodology.
Taxonomy-eligible economic activities
Who must act
Eligibility
Eligibility usually needs the sustainability, finance, and business owner who can identify the activity description, reporting boundary, and KPI line affected.
Article 3 requires more than coverage: it requires substantial contribution, DNSH, minimum safeguards, and technical screening criteria.
minimum safeguards
Operational implication
Do not leave alignment to the reporting team alone; they need source evidence from business, finance, legal, environmental, human-rights, and technical control owners where those facts are relevant.
The Article 3 conditions explain why alignment evidence commonly spans technical, environmental, safeguards, and reporting controls.
technical screening criteria
Trigger or threshold
Eligibility
Eligibility is triggered when an in-scope undertaking prepares Article 8 disclosure and must classify activities, assets, or exposures as Taxonomy-eligible or non-eligible.
The FAQ states that all large undertakings needed to report eligible and non-eligible activity proportions during the initial Article 8 reporting phase.
eligible and non-eligible
Alignment
Alignment assessment is required where the applicable Article 8 reporting route requires aligned KPIs. It is also needed to support a voluntary claim that an eligible activity is Taxonomy-aligned or environmentally sustainable.
The delegated act requires disclosure of Taxonomy-aligned activities and the environmental objectives to which they substantially contribute.
Taxonomy-aligned activities
Operational implication
Classify first, then apply the alignment assessment required by the reporting route. Record evidence gaps and any applicable assessment relief separately; insufficient data does not establish alignment.
The FAQ ties eligibility to delegated-act activity descriptions and says eligibility assessment is not dependent on accounting standards.
not dependent on the accounting standards
Alignment
Alignment test: does that eligible activity make a substantial contribution, avoid significant harm to other objectives, meet minimum safeguards, and satisfy ?
The delegated act's separate eligible and aligned concepts support treating eligibility as a coverage finding rather than a sustainability finding.
Taxonomy-aligned economic activities
Evidence records
Eligibility
Eligibility evidence is the activity mapping: delegated-act activity description, internal activity or exposure, reporting boundary, and KPI amount included or excluded.
The delegated act specifies KPI content, presentation, and methodology, which creates the record structure for activity and KPI evidence.
methodology to comply
Alignment
Alignment evidence is the test file: , substantial contribution calculation, DNSH evidence, minimum safeguards conclusion, and allocation method where only part of an amount is aligned.
The notice requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities when an asset supports both aligned and non-aligned outputs.
based on verifiable evidence
Operational implication
Store eligibility and alignment evidence separately enough that reviewers can see why an amount moved from non-eligible to eligible, or from eligible to aligned.
Allocation guidance supports keeping the mapping, methodology, and evidence trail available for review.
methodology used to allocate
Reporting timing
Eligibility
Eligibility classification appears in Article 8 reporting when the undertaking discloses eligible and non-eligible activity or exposure proportions for the reporting period.
The FAQ describes the phased Article 8 timetable in which eligibility reporting preceded full alignment reporting for certain undertaking categories.
not required to assess
Alignment
Alignment is disclosed only when the applicable Article 8 timetable and KPI methodology require or allow aligned activity reporting for the undertaking type and activity set.
The delegated act sets application and disclosure requirements for undertaking KPIs and Taxonomy-aligned activity reporting.
key performance indicators
Operational implication
Avoid reusing first-year eligibility conclusions as current alignment evidence; confirm the current delegated acts, reporting templates, and KPI methodology before publication.
The notice's CapEx allocation guidance shows that aligned KPI treatment depends on evidence and methodology, not only activity coverage.
accurate allocation
Operational implication
Build the evidence workflow so the eligibility inventory feeds the alignment test, but make the aligned KPI numerator depend on completed criteria evidence.
Article 3 supports the alignment state by listing the conditions for environmentally sustainable activity.
carried out in compliance
Operational implication
Use four visible states in Taxonomy reporting workpapers: non-eligible, eligible not aligned, aligned, and non-assessed non-material. Keep the reason and evidence for each state so coverage or non-assessment is not presented as proof of environmental sustainability.
The binding 2026 amendment adds separate reporting for activities not assessed because they are considered non-material.
reported separately as non-material
Practical decision rule
How should teams decide between EU Taxonomy eligibility and alignment?
Start with eligibility: check whether the economic activity is described in the applicable Taxonomy delegated act.
Only proceed to the four-part alignment test after confirming eligibility; alignment is not a substitute for the scoping step.
Keep separate evidence sets for the eligibility mapping and each Article 3 alignment condition so a future reviewer can rerun the analysis independently.
Escalate when an activity spans multiple delegated acts, delegated-act versions, or when DNSH or minimum-safeguard findings are unclear.
Article 3 sets the four-part alignment conditions that follow a positive eligibility finding.
environmentally sustainable economic activity
Search this module
Find a question or answer quickly
4 of 4 questions
Question 1
What is the difference between Taxonomy eligibility and alignment?
is about coverage. For Article 8 reporting, teams first map an economic activity to the activities described in the Taxonomy delegated acts and classify it as eligible or non-eligible for the relevant KPI or exposure.
is a higher bar. Article 3 says an economic activity qualifies as environmentally sustainable only where it contributes substantially to one or more Article 9 environmental objectives, does no significant harm to the other objectives, complies with minimum safeguards, and meets the established by the Commission.
Do not use an eligible activity label as a sustainability claim by itself.
Run eligibility before alignment, because an alignment assessment needs the relevant delegated-act activity and criteria.
Keep non-eligible, eligible-not-aligned, and aligned amounts separate in Article 8 evidence and explanations.
Article 3 provides the four conditions for an economic activity to qualify as environmentally sustainable; Article 8 requires undertakings in scope to disclose how and to what extent their activities are associated with environmentally sustainable economic activities.
The Disclosures Delegated Act implements Article 8 and uses separate eligible, non-eligible, and aligned disclosure concepts for undertaking KPIs.
Taxonomy-eligible and Taxonomy non-eligible economic activities
Question 2
How should teams apply the distinction in Article 8 reporting?
For non-financial undertakings, Article 8 focuses on the proportions of turnover, capital expenditure (CapEx), and operating expenditure (OpEx) associated with environmentally sustainable economic activities. The Disclosures Delegated Act and Commission FAQ explain that eligibility is reported before or alongside alignment, but eligibility reporting is not the same as proving alignment.
For financial undertakings, the Article 8 framework uses financial KPIs that look through to financed or invested activities. The financial KPI should show whether the underlying activity or exposure is non-eligible, eligible but not aligned, aligned, or left unassessed under a specific reporting option.
Regulation (EU) 2026/73 adds a separate state from 1 January 2026: non-assessed because the activity or exposure is considered non-material under a KPI-specific option. For non-financial undertakings, the cumulative turnover or CapEx threshold is 10% of the respective denominator, with a corresponding rule for material OpEx. These amounts stay in the denominator and are reported separately; they must not be relabelled as eligible, aligned, non-aligned, or non-eligible.
Map each activity or exposure to the delegated-act activity description before calculating eligible amounts.
Only report aligned amounts where the activity-specific , DNSH criteria, and minimum safeguards assessment are evidenced.
Document the KPI basis used, such as turnover, CapEx, OpEx, total assets, the Green Asset Ratio (GAR), or other financial-undertaking templates that apply to the reporting entity.
Keep non-assessed non-material amounts separate from failed or incomplete alignment assessments.
Commission FAQ explains that large undertakings reported eligible and non-eligible activities first, and were not required in that initial phase to assess Taxonomy alignment.
The 2023 Article 8 notice gives practical guidance on KPI allocation and requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities.
Binding source for the 2026 KPI-specific non-materiality options and separate presentation of activities or exposures not assessed for eligibility and alignment.
not assessed for Taxonomy-eligibility and Taxonomy-alignment
Question 3
What evidence should support eligibility and alignment decisions?
The evidence pack should show both steps. Eligibility evidence should prove why the activity is described in the relevant Taxonomy delegated act. Alignment evidence should prove why the same activity meets the Article 3 conditions and the activity-level .
The most useful file is a reconciliation record: source activity description, internal activity or exposure, KPI denominator and numerator treatment, alignment test result, and the reason any eligible amount was excluded from aligned amounts.
Eligibility record: delegated-act activity name or section, mapped business activity, reporting entity boundary, and eligible/non-eligible conclusion.
KPI record: turnover, CapEx, OpEx, total assets, GAR, or other applicable KPI treatment, with the accounting or consolidation basis used.
Allocation record: methodology and evidence for split-use assets, mixed activities, internal consumption, or pro-rata treatment.
Disclosure-control record: reviewer sign-off, unresolved assumptions, and wording checks that prevent eligible activity from being presented as aligned.
Article 3 ties alignment to substantial contribution, DNSH, minimum safeguards, and technical screening criteria; evidence should therefore cover each condition.
The notice states that CapEx allocation to Taxonomy-aligned activities should be based on verifiable evidence, supporting documented allocation records for mixed-use assets.
allocate CapEx to Taxonomy-aligned activities
Recommended next step
Turn EU Taxonomy classifications into reviewable evidence
Use Sorena to keep eligibility mapping, alignment tests, KPI calculations, and disclosure wording tied to the source record behind each Taxonomy classification.
Do not call an eligible activity Taxonomy-aligned before completing the alignment test. Eligibility only says the activity is covered by the Taxonomy activity list. Alignment says the activity satisfies the sustainability conditions and the activity-specific criteria.
A second mistake is to keep only the final KPI table. Reviewers need the mapping and test evidence behind the table, especially where an activity is eligible but not aligned, or where only part of CapEx, OpEx, turnover, or an exposure is allocated to aligned activity.
Avoid saying an activity is environmentally sustainable when the evidence only supports eligibility.
Avoid merging eligible and aligned amounts in internal dashboards or external summaries.
Avoid unreviewed carry-forward classifications after delegated-act, activity, asset-use, or reporting-boundary changes.
The delegated act separates Taxonomy-eligible/non-eligible disclosures from Taxonomy-aligned KPI disclosures, so teams should preserve that distinction in reporting controls.
Delegated act specifying Article 8 disclosure content, presentation, methodology, and KPI treatment for financial and non-financial undertakings.
The Disclosures Delegated Act implements Article 8 and uses separate eligible, non-eligible, and aligned disclosure concepts for undertaking KPIs.
The delegated act separates Taxonomy-eligible/non-eligible disclosures from Taxonomy-aligned KPI disclosures, so teams should preserve that distinction in reporting controls.
Show 9 more
The delegated act separates eligible/non-eligible disclosure from aligned activity disclosure in KPI templates and methodology.
Article 8 disclosure methodology is tied to undertaking KPIs, so eligibility work needs both activity classification and finance reporting inputs.
The delegated act requires disclosure of Taxonomy-aligned activities and the environmental objectives to which they substantially contribute.
The delegated act's separate eligible and aligned concepts support treating eligibility as a coverage finding rather than a sustainability finding.
The delegated act specifies KPI content, presentation, and methodology, which creates the record structure for activity and KPI evidence.
The delegated act sets application and disclosure requirements for undertaking KPIs and Taxonomy-aligned activity reporting.
The delegated act aims to make Article 8 disclosures uniform and assessable through KPI content, presentation, and methodology.
The delegated act says disclosures help investors and the public assess the proportion of environmentally sustainable activities.
The original Article 8 templates and methodology distinguish non-eligible, eligible, and aligned information.
"content and presentation of information"
More quoted passages
"Taxonomy-eligible and Taxonomy non-eligible economic activities"
"Taxonomy-aligned activities"
"Taxonomy-eligible economic activities"
"turnover, capital expenditure and operating expenditure"
"Taxonomy-aligned economic activities"
"methodology to comply"
"key performance indicators"
"uniform application"
"investors and the public"
"Taxonomy-eligible but not Taxonomy-aligned activity"
Commission FAQ explaining how financial and non-financial undertakings reported Taxonomy-eligible activities and assets under the Article 8 Disclosures Delegated Act.
Commission FAQ explains that large undertakings reported eligible and non-eligible activities first, and were not required in that initial phase to assess Taxonomy alignment.
The FAQ explains eligibility reporting as a preparation step for later alignment disclosures, not as a substitute for an alignment assessment.
Show 8 more
The FAQ identifies Article 1(5) of the Disclosures Delegated Act as the basis for defining eligible economic activity by reference to delegated-act descriptions.
The FAQ states that all large undertakings needed to report eligible and non-eligible activity proportions during the initial Article 8 reporting phase.
The FAQ frames eligibility reporting as preparation for alignment disclosure, supporting sequential classification and assessment.
The FAQ ties eligibility to delegated-act activity descriptions and says eligibility assessment is not dependent on accounting standards.
The FAQ describes the phased Article 8 timetable in which eligibility reporting preceded full alignment reporting for certain undertaking categories.
The FAQ explains that eligibility reporting helps undertakings prepare for alignment disclosures.
The FAQ supports the eligibility state by describing Taxonomy-eligible and non-eligible activity reporting.
Article 8 FAQ supports the eligibility first, alignment second sequence and the evidence standard.
"Taxonomy-eligible economic activities and assets"
Primary regulation for Article 3 alignment conditions, Article 8 undertaking disclosures, and Article 9 environmental objectives.
Article 3 provides the four conditions for an economic activity to qualify as environmentally sustainable; Article 8 requires undertakings in scope to disclose how and to what extent their activities are associated with environmentally sustainable economic activities.
Article 3 ties alignment to substantial contribution, DNSH, minimum safeguards, and technical screening criteria; evidence should therefore cover each condition.
Show 7 more
Article 3 gives the conditions for an economic activity to qualify as environmentally sustainable.
Article 3 requires more than coverage: it requires substantial contribution, DNSH, minimum safeguards, and technical screening criteria.
The Article 3 conditions explain why alignment evidence commonly spans technical, environmental, safeguards, and reporting controls.
Article 3 sets the alignment conditions: substantial contribution, DNSH, minimum safeguards, and technical screening criteria.
Article 3 prevents an activity from being treated as environmentally sustainable unless all stated conditions are met.
Article 3 explains why eligibility evidence can feed, but cannot replace, the alignment test.
Article 3 supports the alignment state by listing the conditions for environmentally sustainable activity.
Commission notice with practical Article 8 interpretation, including allocation and evidence guidance for Taxonomy-aligned KPI reporting.
The 2023 Article 8 notice gives practical guidance on KPI allocation and requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities.
The notice states that CapEx allocation to Taxonomy-aligned activities should be based on verifiable evidence, supporting documented allocation records for mixed-use assets.
Show 4 more
The notice requires verifiable evidence for allocating CapEx to Taxonomy-aligned activities when an asset supports both aligned and non-aligned outputs.
Allocation guidance supports keeping the mapping, methodology, and evidence trail available for review.
The 2023 notice provides later practical interpretation, so current reporting work should not rely only on initial eligibility-phase assumptions.
The notice's CapEx allocation guidance shows that aligned KPI treatment depends on evidence and methodology, not only activity coverage.
Current binding amendment distinguishing non-assessed non-material amounts from eligibility and alignment findings from 1 January 2026.
Binding source for the 2026 KPI-specific non-materiality options and separate presentation of activities or exposures not assessed for eligibility and alignment.
The binding 2026 amendment adds separate reporting for activities not assessed because they are considered non-material.
"reported separately as non-material"
More quoted passages
"not assessed for Taxonomy-eligibility and Taxonomy-alignment"