You may invest in Nuclear and Gas! The European Union has now labelled these two sources of energy as “green” and sustainable investments on the basis that they will help the bloc make the transition to carbon-free energy sources by 2050. This closes a year of divisive discussions in Brussels and across Europe about the integrity of the EU’s “taxonomy” of legitimate green investments. Or has it? In reality, the battle has just begun.
Paris and Berlin were adamant that their chosen energy industries are fit to receive the green label. The Commission was handed the politically poisonous task of reconciling the positions. Now this largely unchanged revision, officially called ‘the Complementary Climate Delegated Act on certain nuclear and gas activities’, provides a compromise of both visions. An “imperfect but real solution,“ according to EU Financial Services Commissioner Mairead McGuinness.
Brussels’ final version of the text keeps the classification of nuclear largely unchanged. New nuclear power stations, which operate without any carbon dioxide emissions, will qualify for the green label for permits issued before 2045 if countries can provide plans for safe waste management and decommissioning. The only significant change relates to accident-tolerant nuclear fuel (still at the research stage), which under the proposal must be available “from 2025” for nuclear projects to win the coveted EU green investment label. The inclusion has been supported by nuclear-reliant EU countries led by France.
Natural gas will also be given the green label if it is used to replace more polluting energy sources, such as coal, and if direct emissions from its use fall below 270g of CO2 per kilowatt/hour, or an average of less than 550kg a year over 20 years. New plants must also replace an existing coal-fired power station and be built by 31 December 2030 to win the green EU label.
The proposal also sets out new disclosure rules, with companies having to report yearly about compliance with the green criteria. Compliance will have to be validated by external auditors to avoid ‘greenwashing’ and make sure the sought-after EU green investment label is not incorrectly granted based on false promises.
The Commission was likely unhappy with its role yesterday. As soon as the taxonomy was announced, the proposal came under fire from all sides of the debate. Governments are announcing lawsuits to stop the measures. Denmark, Sweden, Austria, and the Netherlands sent a letter to the EU executive on this matter. Activist Greta Thunberg gave it a big thumbs down. There are even reports that the EU Commissioners from Austria, Spain, and Portugal voted down the rules in the meeting of the College of Commissioners- something that is highly unusual in Brussels, where the College tends to make decisions by consensus.
The fight on this matter will now continue as strongly as before, just in other fora. The proposal soon goes to the European Parliament and EU member states, which have four months to scrutinise it. They cannot make changes to the proposal and can only decide to accept or reject it. The latter is very unlikely, however. The most likely outcome is that the proposal will enter into force after another round of heated debate, vexing renewable-only advocates but helping to keep the EU’s lights on while it makes the transition to a renewable-only future.
Get in touch if you’d like to learn more or take part in the debate! Reach out to email@example.com