New Year, New Taxonomy Controversy

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    Stockholm (NordSIP) – While most of us were busy popping up champagne, the European Commission chose the last hours of New Year’s Eve 2021 to initiate consultations on the part of the green taxonomy concerning gas and nuclear activities. “Taking account of scientific advice and current technological progress, as well as varying transition challenges across Member States, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” reads the press release from Brussels published on the very first day of 2022.

    The Platform on Sustainable Finance and the Member States Expert Group on Sustainable Finance have just until 12 January to study the draft text of a Taxonomy Complementary Delegated Act covering certain gas and nuclear activities and provide feedback. The Commission will then analyse their contributions and formally adopt the complementary Delegated Act in January 2022. The next step will be to send it to the co-legislators for scrutiny, which might take up to six months.

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    According to the proposal, nuclear projects would be labelled “sustainable” if the host country can “ensure that no significant harm is done to other environmental objectives due to potential risks arising from the long-term storage and final disposal of nuclear waste”. This applies to all “new nuclear installations for which the construction permit has been issued by 2045,” the text says. The draft also notes that substantial progress is presently accomplished in the realisation of deep geological disposal facilities and, therefore, realistic solutions are becoming available for member states to develop and operate such facilities by 2050.

    Meanwhile, the proposal is for investments in natural gas power plants to be deemed “green” if the “direct GHG emissions of the activity are lower than 270g of CO2 equivalent per kilowatt-hour of the output energy”, and if they replace a more polluting fossil fuel plant and receive a construction permit by 31 December 2030. “By using gas as a bridge technology, we can achieve CO2 reductions faster by moving away from, for example, coal without having to wait for fully carbon-free technologies to be widely available,” comments Esther de Lange, a senior member of the European People’s Party in the EU Parliament.

    “It is necessary to provide a high degree of transparency to investors concerning fossil gas and nuclear energy activities for which technical screening criteria are to be laid down,” states the draft proposal. “To ensure transparency, the Commission will amend the Taxonomy Disclosure Delegated Act so that investors can identify if activities include gas or nuclear activities, and to what extent, so they can make an informed choice,” reads the press release.

    Reactions to the proposal

    European politicians with opposing views on the proposal were quick to respond. Representatives of the German government are criticising sharply the Commission initiative claiming that it “waters down the good label for sustainability”. Green politicians in Austria and Luxembourg, too, say the proposal could “damage the credibility of the new rulebook and threaten to divert investment away from renewables”. Meanwhile, several key countries, including France, strongly support the inclusion of nuclear power in the taxonomy. “The green transition is the best thing that’s happening right now,” commented Finland’s Economy Minister, Mika Lintila. “It’s driving global investments at the moment, but it must be done in a way that’s realistic and without destroying Europe’s competitiveness.”

    Apart from politicians, many other concerned parties react strongly to the proposal. Greenpeace labelled the plans a “license to greenwash”. “Polluting companies will be delighted to have the EU’s seal of approval to attract cash and keep wrecking the planet by burning fossil gas and producing radioactive waste,” comments Greenpeace EU programme director Magda Stoczkiewic. “The Commission has shown a shocking disregard for the climate crisis, nature and the people of Europe,” she adds. Greenpeace’ criticism is echoed by other environmental organisations, like the World Wide Fund for Nature (WWF), and the European Environmental Bureau and Friends of the Earth. According to the Climate Action Network Europe (CAN Europe), natural gas is incompatible with the Paris Agreement’s target of keeping limiting global warming to 1.5°C, and nuclear power contravenes the taxonomy’s principle of “do no harm” given the “environmental and social hazards at all stages of its supply chain – from mining to the disposal of nuclear waste”.

    There are also voices welcoming the taxonomy proposal, notably those poised to gain from the new regulation. According to FORATOM, a Brussels-based trade association that represents Europe’s nuclear energy industry, nuclear technology “clearly contributes to climate mitigation objectives and does not cause more harm than any other power-producing technology already considered as taxonomy compliant.” And Eurogas, an association representing gas companies, emphasises in a statement the vital role natural gas could play in the ongoing coal phase-out.

    The discussions on the subject are bound to be lively during the next couple of weeks and beyond. And they are hardly confined within Europe. Just last week, South Korea included liquid natural gas, while excluding nuclear in its green taxonomy. Stay tuned.

    Image by Albrecht Fietz from Pixabay


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