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 technical screening criteria?
This FAQ helps keep Article 8 classifications, 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, minimum-safeguard, 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 .
Alignment starts from that mapped activity and tests whether it qualifies as environmentally sustainable under Article 3 and the applicable activity criteria.
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.
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.
Classify first; then run the alignment test only for activity-exposure combinations where the delegated-act mapping and data are specific enough to support the test.
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.
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.
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.
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.
Avoid reusing first-year eligibility conclusions as current alignment evidence; confirm the current delegated acts, reporting templates, and KPI methodology before publication.
Build the evidence workflow so the eligibility inventory feeds the alignment test, but make the aligned KPI numerator depend on completed criteria evidence.
Use four visible states in Taxonomy reporting workpapers: non-eligible, eligible not aligned, aligned, and non-assessed non-material. This prevents the most damaging shortcut: treating coverage or non-assessment as proof of environmental sustainability.
Alignment starts from that mapped activity and tests whether it qualifies as environmentally sustainable under Article 3 and the applicable activity criteria.
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.
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.
Classify first; then run the alignment test only for activity-exposure combinations where the delegated-act mapping and data are specific enough to support the test.
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.
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.
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.
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.
Avoid reusing first-year eligibility conclusions as current alignment evidence; confirm the current delegated acts, reporting templates, and KPI methodology before publication.
Build the evidence workflow so the eligibility inventory feeds the alignment test, but make the aligned KPI numerator depend on completed criteria evidence.
Use four visible states in Taxonomy reporting workpapers: non-eligible, eligible not aligned, aligned, and non-assessed non-material. This prevents the most damaging shortcut: treating coverage or non-assessment as proof of environmental sustainability.
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.
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.
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, and operating expenditure 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, 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.
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.
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.