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EU Defers Decision on Green Label for Nuclear, Natural Gas

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The European Union was expected to defer a decision on whether its new green finance rules, due to be published today, would list nuclear and gas-fired power plants as sustainable investments, according to leaked documents obtained last week by Euractiv.

The first section of the EU executive’s “sustainable finance taxonomy” was to set specific rules for determining whether economic activities could be labelled green, the media network reported last week. The Taxonomy Climate Delegated Act “sets out detailed green finance criteria for undisputed low-carbon technologies like renewables, but leaves out gas and nuclear power for a separate decision, to be taken at a later stage by EU member states and the European Parliament.”

The two technologies “have proven the most contentious issues in the debate on green finance, with countries in eastern and southern Europe threatening to veto an earlier draft because it did not label gas as ‘green’ or ‘transition’ investments,” Euractiv adds. “France, meanwhile, said it would fight to make nuclear recognized as a green technology under the EU’s sustainable finance rules,” with economy minister, Bruno Le Maire declaring the issue “a real political fight”.

By punting on the decision, the European Commission is “effectively throwing a hot potato” at EU member states and the European Parliament, which would address the issue as co-legislators.

The EU executive said the decision “will bring clarity to the debate” after a summit last December voted to recognize gas as a climate transition technology. “The Commission last month suggested labelling some gas plants as green, under strict conditions, when they replace coal in power generation,” Euractiv says. “But that proposal satisfied neither side, nor the EU’s own green finance advisers, who urged Brussels to resist political pressure to weaken the rules, saying their credibility is at stake.”

The Commission said it saw “several advantages” to leaving the final decision to the European Parliament and member states.

“On the one hand, it will allow a transparent debate by co-legislators on the contribution of natural gas and nuclear technologies to the decarbonization objectives, respecting the right of Member States to determine their energy mix in an appropriate way,” said a document viewed by Euractiv. “On the other hand, it will clarify to investors in a timely manner how such investments should be treated from the perspective of environmental considerations.”

Environment advocates greeted the EU plan as a “pragmatic” response that allows the continent to move forward with less controversial parts of the taxonomy, writes Euractiv reporter Frédéric Simon.

“Postponing the discussion on fossil fuels is a political necessity at this stage, due to the fossil fuel lobbies’ enormous pressure on the Commission to greenwash their activities,” said WWF sustainable finance spokesperson Henry Eviston. “However, the EU must quickly clarify that fossil fuels are not green. Full stop. The Green Deal’s credibility is at stake here.”

Environmental groups were also concerned that forestry and bioenergy will be included in the first batch of implementation rules expected today. “Forestry and bioenergy criteria have moved from being science-based to being Sweden-based, and should therefore be postponed in order to produce criteria that are scientifically credible,” Eviston said.

“Bioenergy is particularly sensitive for Nordic countries, who rely on biomass for a large share of their renewable energy consumption,” Simon explains.

Euractiv has more on the developing story in the EU.

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Matt Chester's picture
Matt Chester on Apr 23, 2021

By punting on the decision, the European Commission is “effectively throwing a hot potato” at EU member states and the European Parliament, which would address the issue as co-legislators.

I also wonder if this is the body really not wanting to plant their flag on the issue and hoping the free market will make its decision for it. 

Bob Meinetz's picture
Bob Meinetz on Apr 25, 2021

The free market will always choose the cheapest solution, Matt. Indifferent to climate change and social justice, the free market is ruled by self-interest alone.

Wal-mart? Amazon? Examples abound. We should hope the free market is never tasked with making environmental decisions.

Nathan Wilson's picture
Nathan Wilson on Apr 26, 2021

Political advocacy groups such as fossil fuel advocacy groups and Green groups have a right to be heard, and even to be thrown an occasional small bone by governments.  But large policies that have a large economical and lifestyle impact on the majority of the population as well as on natural ecosystems should place primary consideration on the underlying science.

And the science underlying of the climate issue simply says we must focus on reducing emissions of green-house gases such as CO2 and methane.  The more that governments dilute this very important effort with the desire to appease fossil fuel companies and Green groups, the farther success will slide into the future.

The real-world data is irrefutable:  the US and UK have modestly reduced per kWh electricity-sector CO2 emissions by replacing coal usage with (non-CCS) fossil gas and renewables while maintaining nuclear; France has dramatically reduced per kWh electricity-sector CO2 emissions by replacing (imported) oil & coal usage with nuclear and hydro.  Very low electricity-sector emissions are needed to enable reductions in other sectors via electrification.  Policies which ignore or obscure these data are simply not supportive of our climate goals.

The Green agenda is related to, but is significantly different than the technology-neutral emission reduction policy which we need.

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