The European Union, has drawn up plans to label some natural gas and nuclear energy power plants as “transitional” or “green” investments provided they meet specific criteria such as displacing more polluting coal plants.
The European Commission is expected to propose rules in January deciding whether gas and nuclear projects will be included in the EU “sustainable finance taxonomy”.
This 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 taxonomy to some EU funding, meaning the rules could decide which projects are eligible for certain public finance.
A draft of the Commission’s proposal, obtained by EURACTIV, 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.
The lifetime extension of existing power plants will also be considered green “in view of the long lead times for investments in new nuclear generation capacity,” the draft says. To be considered green, these will however need to “include modifications and safety upgrades” to ensure they comply with “the highest achievable safety standards”, according to the draft.
Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt-hour, replace a more polluting fossil fuel plant, and receive a construction permit by 31 December 2030. Such plants must meet other conditions including that they are technically equipped to burn low-carbon gases.
Gas and nuclear power generation would be labelled green on the grounds that they are “transitional” activities – defined as one that is not fully sustainable, but which has emissions below industry average and does not lock Europe into polluting assets during the shift to clean energy.
“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, adding that consultations on a draft began on Friday.
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 told Reuters.
However, natural gas and nuclear will be subject to strict conditions, the official added.
EU countries and a panel of expert advisors will scrutinise the draft proposal, which could change before it is due to be published later in January. EU member states were given until 12 January to provide feedback, EURACTIV understands.
Once published, the proposal can be vetoed by a majority of EU countries or by the European Parliament, but it cannot be amended.
The policy has been mired in lobbying from governments for more than a year and EU countries disagree on which fuels are truly sustainable.
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 expert advisers had recommended that gas plants not be labelled as green investments unless they met a lower 100g CO2/kwh emissions limit, based on the deep emissions cuts scientists say are needed 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 deemed green given the potential environmental impact of radioactive waste disposal.
Brussels finished the rules last year for parts of the green list including sectors such as buildings and transport and from this month investments not included in the taxonomy cannot be marketed as climate-friendly in the EU. The gas and nuclear rules will kick in later.
EU countries, including the Czech Republic, Finland and France, which gets around 70% of its power from nuclear energy, see it as crucial to phasing out CO2-emitting coal fuel power.
However, other countries, like Luxembourg, Germany and Austria, are strongly against nuclear energy.
On Saturday, Luxembourg energy minister Claude Turmes said on Twitter that the proposal risked allowing greenwashing. He added that he and the ministers of Germany and Austria would examine the proposal in detail and discuss further steps.
Green MEPs have also criticised it, with German lawmaker Michael Bloss writing on Twitter: “Labelling nuclear and gas as green is pure greenwashing! Unfortunately, the EU Commission under Ursula von der Leyen has now done just that. We, the Greens/EFA, clearly oppose this. [A] real European energy transition is only possible with 100% renewables!”
Draft CDA 31-12-2021
> The full draft document can be consulted below or downloaded here: