EU Leaning Towards Controversial Move To Label Gas, Nuclear ‘Green’

The European Union has drawn up plans to label some natural gas and nuclear energy projects as “green” investments after a year-long battle between governments over which investments are truly climate-friendly. The decision is widely blamed on the continent’s high dependence on gas, and a controversial decision by key member countries, especially the UK and Germany to shut down some nuclear plants, worsening an already tight energy market.

The Commission is expected to propose rules in January deciding whether gas and nuclear projects will be included in the EU “sustainable finance taxonomy”.

To qualify, there is a list of economic activities and the environmental criteria they must meet to be labelled as green investments.

By restricting the “green” label to truly climate-friendly projects, the system aims to make those investments more attractive to private capital, and stop “greenwashing“, where companies or investors overstate their eco-friendly credentials.

Brussels has also made moves to apply the system to some EU funding, meaning the rules could decide which projects are eligible for certain public finance. This is again crucial, as nuclear proponents have claimed it is unfair to deprive it of concessional funding when it can deliver carbon free energy.

A draft of the Commission’s proposal, according to media reports, would label nuclear power plant investments as green if the project has a plan, funds and a site to safely dispose of radioactive waste. To be deemed green, new nuclear plants must receive construction permits before 2045. So far, nuclear plants have taken anything between 8 to 12 years to make.

Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt hour (kWh), replace a more polluting fossil fuel plant (read coal), receive a construction permit by Dec. 31 2030 and plan to switch to low-carbon gases by the end of 2035.

Gas and nuclear power generation would be labelled green on the grounds that they are “transitional” activities – defined as those that are not fully sustainable, but which have emissions below industry average and do not lock in polluting assets. Or do not make a bad situation worse.

“Taking account of scientific advice and current technological progress as well as varying transition challenges across member states, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” the European Commission said in a statement.

To help states with varying energy backgrounds to transition, “under certain conditions, solutions can make sense that do not look exactly ‘green’ at first glance,” a Commission source reportedly said, adding that gas and nuclear investments would face “strict conditions”.

EU countries and a panel of experts will scrutinise the draft proposal, which could change before it is due to be published later in January. Once published, it could be vetoed by a majority of EU countries or the European Parliament.

Natural gas emits roughly half the CO2 emissions of coal when burned in power plants, but gas infrastructure is also associated with leaks of methane, a potent planet-warming gas.

The EU’s advisers had recommended that gas plants not be labelled as green investments unless they met a lower 100g CO2e/kWh emissions limit, based on the deep emissions cuts scientists say are needed to avoid disastrous climate change.

Some environmental campaigners and Green EU lawmakers have criticised the leaked proposal on gas and nuclear.

Austria opposes nuclear power, alongside countries including Germany and Luxembourg. EU states including the Czech Republic, Finland and France, which gets around 70% of its power from the fuel, see nuclear as crucial to phasing out CO2-emitting coal fuel power. Other critics have pointed out that shutting down nuclear has only increased dependence on a more polluting alternative, gas, and on Russia, a supplier that has never been averse to using its role to achieve political ends.