Experts in Brussels planning sustainable finance investment rules are calling into question an EU proposal to label some natural gas and nuclear power as sources of green energy, writes Fiona Keating
They are requesting “substantial changes” to draft taxonomy rules on sustainable investment to make sure that new nuclear power stations contribute to the EU’s climate targets.
The EU Platform on Sustainable Finance, a European Commission advisory body was set up to create a guide investment into green activities. This signals a first attempt by a major global regulator to determine definitions of sustainable economic activity and eradicate greenwashing in the finance industry.
The aims of the group are to specify which investments can be considered sustainable and also to encourage private investment into working to achieve Europe’s carbon neutrality by 2050.
The findings of the platform will be vital in opening up to potentially billions of euros in investments toward technologies required to build clean energy power plants.
“Now is not the time to blur the lines on the environmental realities of climate neutrality,” said Nathan Fabian, the chair of the EU Platform on Sustainable Finance. “If more tools are needed to describe the intermediate steps as our industries transition to meet environmental goals, we should take care to develop them properly,” he added in a statement.
Supporters of the rules in their current from include France, the world’s largest net exporter of electricity, which earns over €3 billion per year from this.
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French president Emmanuel Macron has said that including nuclear “was in line with the protection against climate change”.
Some member states have criticised the EU over the draft plan, which will allow nuclear energy and some forms of natural gas to be considered sustainable.
Countries including Austria and Luxembourg have said that they will take the commission to the European Court of Justice if the taxonomy is approved in its present form.
Natural gas has a lower carbon footprint than coal but still produces CO2. It can qualify for the green label if it is used to switch from coal.
Nuclear power has no carbon footprint but produces toxic waste with radiation risks. It is considered sustainable if countries can demonstrate they have an effective waste disposal system. The guidelines in the document include a “do no significant harm” clause, which is a requirement for eligibility.
Germany has voiced its opposition. “We have once again clearly expressed our rejection of the inclusion of nuclear energy (in the EU taxonomy) as it is risky and expensive”, Economy and Climate Protection Minister Robert Habeck and Environment Minister Steffi Lemke, both from the Green party, said.
Faustine Delasalle, director of the Energy Transitions Commission said “the move to label some investments in natural gas – a fossil fuel which causes both CO2 and methane emissions – as climate-friendly risks detracting the finance community’s attention from the highest investment priority for Europe’s energy transition.”
The document is due to be completed by the end of January.
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