EU drafts plan to label gas and nuclear investments as green

Image Credit: REUTERS / Benoit Tessier

After years of fighting between governments for truly climate-friendly investments, the European Union has drawn up plans to label some natural gas and nuclear power projects as “green” investments.

The European Commission is expected to propose rules in January to decide whether nuclear and gas projects are included in the EU’s “sustainable finance taxonomy.”

This is a list of economic activities and environmental criteria that must be met to be labeled as a green investment.

By restricting the “green” label to truly climate-friendly projects, the system aims to make these investments more attractive to private equity and stop “greenwashing,” in which companies or investors exaggerate their green credentials.

Brussels has also taken steps to apply the system to some EU funds, meaning that the rules could decide which projects are eligible for specific public funding.

A draft of the Commission’s proposal, seen by Reuters, would label investments in nuclear power plants as green if the project has a plan, resources and location to dispose of the radioactive waste.

To be considered green, new nuclear power plants must obtain a building permit before 2045.

Investments in natural gas power plants are also considered green if they emit less than 270 g of CO2 equivalent per kilowatt hour (kWh), replace a more environmentally harmful power plant with fossil fuels, receive a building permit earlier December 31, 2030, and it is planned to switch to low-carbon gases by the end of 2035.

Gas and nuclear generation would be labeled green, as they are “transition activities” defined as those that are not fully sustainable but have emissions below the industry average and do not contain environmentally damaging assets. .

“Taking into account current scientific advice and technological progress, as well as the different transition challenges between Member States, the Commission believes that natural gas and nuclear power play a role in facilitating the transition to a predominantly renewable future”, the European Commission said in a statement.

To help states with different energy backgrounds make the transition, “under certain conditions, solutions that don’t seem ‘green’ at first glance may make sense,” a commission source told Reuters, adding that the solutions are investments. in gas and nuclear energy. it would be subject to “strict regulations.”

EU countries and a panel of experts will analyze the draft proposal, which could change, before it is published at the end of January.

Once published, most EU countries or the European Parliament could veto it.

The policy has been embroiled in government lobbying for more than a year and EU countries disagree on which fuels are truly sustainable.

Natural gas emits around half the CO2 emissions of coal when burned in power plants, but gas infrastructure has also been linked to methane leaks, a powerful EU adviser recommended that fueled power plants Gas should not be labeled green investments unless they have an impact. Lower emission limit of 100g CO2e / kWh based on deep cuts in deep emissions, according to scientists, are necessary to avoid disastrous climate change.

Nuclear power produces very low CO2 emissions, but the Commission sought expert advice this year on whether the fuel should be considered green given the potential environmental impact of radioactive waste disposal.

Some environmental activists and Green EU lawmakers criticized the leaked proposal on gas and nuclear power.

“By including them … the Commission risks jeopardizing the credibility of the EU’s role as a leading market for sustainable finance,” said Greens President Philippe Lamberts.

Austria opposes nuclear power, along with countries like Germany and Luxembourg. EU states including the Czech Republic, Finland and France, which get around 70% of their energy from fuel, consider nuclear power to be crucial to phase out energy from CO2-emitting coal fuel.

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