Stockholm (NordSIP) – The creation of the EU Taxonomy of green activities and its application was the source of much debate and controversy. One of the most controversial decisions the bloc had to take involved the treatment of nuclear power and natural gas. the issue was exacerbated and brought to the fore by energy security concerns and ultimately led the EU to include these sources in the Taxonomy. However, the decision was not without its challenges, the last of which appears to have now been dismissed.
Nuclear Power, Natural Gas and CO2 Emissions
The field has traditionally been of two minds. On the one hand, there are those that note that nuclear power plants do not emit CO2 emissions and that natural gas represents an important emissions improvement vis-à-vis other fossil fuels. On the other hand, activists will rightly argue that while it does not produce any CO2 emissions, nuclear power requires the mining of nuclear material, often from countries in with dubious human rights records. The economics of nuclear power plants are also burdensome and often late, while nuclear storage also presents environmental and national security risks.
Faced with this trade-off and rising energy security concerns shortly after Russia’s 2022 invasion of Ukraine, the European Commission (EC) favoured the inclusion of the two sectors in the taxonomy via a delegated regulation. The EU’s executive view was that certain fossil gas and nuclear energy activities would be classified as transitional activities contributing to climate change mitigation in a time-limited fashion, dependent on specific conditions and transparency requirements.
This decision triggered strong but ultimately unsuccessful pushback from activists and even some investors, who warned about greenwashing concerns. At the same time, however, Austria gave official voice to these concerns, bringing a case to the Court of Justice of the European Union (CJEU) seeking the annulment of that delegated regulation. Austria was supported in this annulment request by Luxembourg, while the EC’s view was supported by Bulgaria, the Czech Republic, France, Hungary, Poland, Romania, Slovenia, Slovakia and Finland.
CJEU Stands by Nuclear Power
In its decision dismissing Austria’s request, CJEU noted that “by including nuclear energy and fossil gas in the sustainable investment scheme, the Commission did not exceed the powers which the EU legislature properly conferred on it.” The court came to the defence of nuclear power, noting the present absence technological and economic impossibility to fulfil energy demands in a stable manner at scale from other low-carbon alternatives, such as renewable energy sources.
“Moreover, as in the case of other economic activities in the energy generation sector, the Commission was under no obligation to take into account extraction and processing of uranium ore, uranium refining, conversion and enrichment, and fuel assembly and transport, which are upstream or downstream activities, or armed conflicts, sabotage and risk of abuse and proliferation of civilian and military applications,” the ruling explained. Lastly, the court highlighted the importance of the EC’s gradual approach to greenhouse gas reduction for its decision.
“The General Court endorses the view that economic activities in the nuclear energy and fossil gas sectors can, under certain conditions, contribute substantially to climate change mitigation and climate change adaptation. The approach taken by the 2022 delegated regulation is a gradual approach based on a reduction of greenhouse gas emissions in stages, while allowing for security of supply,” he court’s decision concluded.
Greenpeace Pushes Back
While the EC must have celebrated this victory the Court’s decision was not embraced by environmental activists, with Martin Kaiser, executive board member of Greenpeace EV, describing it as a dark day for climate.
“This ruling represents a serious setback for climate and consumer protection. With this decision, the European Court of Justice legitimizes greenwashing in the financial sector and undermines European climate goals. Given the escalating climate crisis, it is incomprehensible how the Court could classify fossil gas and nuclear power as sustainable. This violates the provisions of the Taxonomy Regulation and the Paris Climate Goals. It is neither legally nor climate-policy-wise tenable, as it will result in billions being invested in gas and nuclear power instead of advancing the rapid transition to renewable energies,” Kaiser pushed back.
