Ambiguities and misunderstandings contained in a draft EU proposal could block nuclear power plants from claiming a green investment label under the bloc’s sustainable finance taxonomy, the industry has warned.
The European Commission is currently in the process of putting together a rulebook, known as the sustainable finance taxonomy, to define which investments can be labelled as climate-friendly in the EU.
As part of this, nuclear energy has tentatively been categorised as a “transitional” technology making a “substantial contribution to climate change mitigation” under draft EU plans circulated by the European Commission on 31 December.
To qualify for the transitional label, new nuclear plants must be built before 2045 and show detailed plans to have a disposal facility in place by 2050 for high-level radioactive waste.
However, issues with the draft criteria mean no nuclear power plant would currently be able to claim the coveted green label, the nuclear industry body Foratom told EURACTIV.
This is because of a requirement that power plants must fully apply “the best-available technology and accident-tolerant fuel” to qualify. That fuel is still in the research phase and is currently not available or licenced, Foratom says.
“As it currently stands, no nuclear entity is covered by the taxonomy because of this,” said Jessica Johnson, communications director at Foratom. “If the text does not change, then we do have problems, particularly in relation to accident tolerant fuels – they don’t exist on the market today,” she told EURACTIV.
Criteria based on a currently unavailable fuel “is obviously not acceptable,” Johnson said, adding however that this could simply be a “misunderstanding” by the European Commission.
Nuclear industry leaders expressed their concerns in a letter sent to the EU executive. “Given that Accident-Tolerant Fuels are still at the research phase we believe this requirement should be removed and instead limited to existing legislation and best available technologies.”
Alongside this, the industry has flagged concerns about the draft’s wording regarding the types of nuclear power plants that could qualify.
According to Foratom, criteria for the operation and maintenance of nuclear plants is ambiguous as the proposal only seems to cover new build projects or those undergoing a lifetime extension, potentially excluding the normal operation and maintenance of existing plants.
“We think it’s just an oversight and more an issue of wording. But it is important that it’s clearly stated that the technical screening criteria cover operation and maintenance of existing power plants,” she said.
Foratom has also questioned a requirement for final repositories of high-level radioactive nuclear waste. Companies will only be able to claim the green EU investment label if they can show “a plan with detailed steps” to have them “in operation by 2050,” according to the draft.
While Foratom agrees that such repositories must be available, Johnson said the current wording could mean a plant built in the 2040s would need a final repository in place by 2050, despite not requiring it for decades.
“We don’t see a need to have a final repository lying idle for 20 to 30 years. It doesn’t make much sense to us,” she explained.
“Also it shouldn’t be restricted just to final repositories. We shouldn’t be hampering innovation in other solutions because there is other innovation and research ongoing in terms of other solutions for high level waste and spent fuel,” she added.
Environmental groups also have concerns about this part of the leaked draft – only for the opposite reason.
“If the nuclear plant is reported as taxonomy aligned from year one, but [its plan for disposing of high-level waste] fails by, say 2045, then that means the nuclear plant was not taxonomy aligned at all from year one,” explained Sebastien Godinot from WWF, the global conservation NGO.
“The taxonomy reporting is annual, so there’s something impossible to match there, which means a major greenwashing risk,” Godinot warned.
Some EU member states have vowed to oppose the inclusion of nuclear in the EU’s green finance taxonomy. “If the EU taxonomy includes nuclear energy, we are ready to challenge that in court,” Austria warned in November. The country has since repeated that threat.
Luxembourg, Denmark and Spain have also voiced their opposition to the proposal. But they currently have little support from other EU countries, which are either pro-nuclear or keeping silent on the matter.
Anti-nuclear countries are unlikely to have a sufficient majority to veto the Commission’s draft proposal, known as a “delegated act”. To block a delegated act, they would need at least 72% of EU member states in the EU Council (i.e. 20) representing at least 65% of the EU population.
The European Parliament, however, has a lower voting threshold and will be able to block the proposal by simple majority (i.e. at least 353 MEPs in Plenary).
This makes the Parliament more of a threat to the nuclear industry, even though Foratom is still confident about the outcome. “We don’t think that they would get the number of votes needed to achieve that simple majority. Nevertheless, we are keeping a very close eye on that,” Johnson told EURACTIV.
German conservative lawmaker Peter Liese also believes the Parliament won’t block the proposal. “If I had to make a bet, I’d still bet that the European Parliament wouldn’t end up blocking the delegated act, but I wouldn’t put a lot of money on it anymore,” he told the Suddeutsche Zeitung.
Some EU lawmakers will be hoping they can garner enough support to stop the Commission’s proposal. They include German Green MEP Michael Bloss, who launched a petition to try and increase citizen pressure on the European Commission.
“With this proposal, EU Commission President Ursula von der Leyen is destroying the credibility of the European eco-label for financial investments. Including nuclear power and gas is an unprecedented labelling fraud, because nuclear power and gas are not sustainable energy sources,” Bloss told EURACTIV.
“There is now a lack of clarity for citizens who want to invest their money in sustainable, in the sense of green transformation. Where it says sustainable on it, it must also be sustainable in it, otherwise the entire regulatory framework loses its credibility,” he added.
The European Commission has given EU countries until 21 January to provide feedback on its plans and is expected to publish its proposal shortly after.
[Edited by Frédéric Simon]