Stockholm (NordSIP) – The highly controversial draft Complementary Climate Delegated Act, enlisting certain nuclear and gas energy activities as part of the EU green taxonomy, was approved in principle by the European Commission on 2 February 2022. According to the press release, the College of Commissioners reached a political agreement on the text, which will be formally adopted once translations are available in all EU languages.
The conclusion of the Commission, after allegedly taking into account the plentiful feedback, is that “there is a role for private investment in gas and nuclear activities in the transition,” and that “the gas and nuclear activities selected are in line with the EU’s climate and environmental objectives and will allow us to accelerate the shift from more polluting activities, such as coal generation, towards a climate-neutral future, mostly based on renewable energy sources.”
The technical screening criteria and disclosure and verification requirements have been somewhat adjusted as a result of the feedback, yet the bulk of the text remains the same. The eligibility of both gas and nuclear will be subject to certain conditions under Article 10(2) of the Taxonomy Regulation to ensure that they contribute to the transition to climate neutrality. Fulfilling nuclear and environmental safety requirements is a prerequisite for including nuclear, whereas gas needs to contribute to the transition from coal to renewables. The Complementary Delegated Act also introduces specific disclosure requirements for businesses related to their activities in the gas and nuclear energy sectors.
Reactions
Many Nordic experts, expecting a different result from the consultation, have been quick to express their disappointment. “The romantic in me hoped till the end …but… the EU Commission has chosen to undermine the EU Taxonomy,” comments Robert Vicsai, Portfolio Manager, Sustainable Investments at SEB on LinkedIn. “We didn’t need gas and nuclear being included in the taxonomy. We know that it’s necessary from a transition perspective, but it shouldn’t be associated with the word sustainable,” he adds.
“Nuclear and gas are not green – not as defined by the current Taxonomy Regulation,” writes Nadine Viel Lamare, Senior Advisor Climate and Finance at the Swedish Environmental Protection Agency on LinkedIn. “How can it then be included in it and jeopardize the whole taxonomy idea?” she asks.
Perhaps the most dramatic reaction to the news comes courtesy of Sasja Belsik, Senior Executive in Sustainable Finance, author of “Where the Money Tree Grows” and the weekly newsletter “ESG on a Sunday”. His comment to the Commission’s approval consists of one word only, “End.”
Next Steps
For those opposing the endorsement of gas and nuclear energy by the European Union, the fight is not necessarily over.
As was the case with the other Delegated Acts under the Taxonomy Regulation, the European Parliament and the Council (who have delegated the power to the Commission to adopt Delegated Acts under the Taxonomy Regulation) will have four months to scrutinise the document, and, should they find it necessary, to object to it. Both institutions may request an additional two months of scrutiny time.
The Council will have the right to object to it by reinforced qualified majority, which means that at least 72% of Member States (i.e. at least 20 Member States) representing at least 65% of the EU population are needed to object to the Delegated Act. The European Parliament can object by a majority of its members voting against in plenary (i.e. at least 353 MEPs).
Once the scrutiny period is over and if neither of the co-legislators objects, the Complementary Delegated Act will enter into force and apply as of 1 January 2023.
Image by Edwin Valencia from Pixabay
