The Green Brief – A ‘cloak and dagger’ taxonomy

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As Europe waited to welcome 2022, those in the energy policy bubble suddenly found themselves drawn away from the myriad of fireworks by buzzing phones. 

At five minutes to midnight on New Year’s Eve, the news broke that the European Commission had sent out its draft rules for whether gas and nuclear could be counted as sustainable investments. By the time we’d leapt onto Twitter to lament this, 2022 had been rung in.

Within hours, we had the leak in our inboxes. And what a leak it was! Both gas and nuclear would be considered transitional investments (although to verify that took an entire morning of research in the case of nuclear).

Including gas and nuclear in the taxonomy by putting them in the lowest tier of green investment seemed a compromise between their supporters and opponents.

But if you walk in the middle of the road, you’ll be hit by cars coming from both sides. And so it was that the European Commission’s draft faced criticism from the nuclear and gas industry as well as from environmentalists

To make things worse, the EU executive gave its critics more ammunition. Not only did it walk down the middle of the road, but it did so in a high visibility jacket, almost as if it was waving a banner saying “OPEN GOAL”.

That open goal, which now contains footballs from lawmakers, EU countries and environmentalists, is the opaqueness of the procedure that the EU executive has chosen to pass its proposed legislation, which came in the form of a “delegated act”. 

Delegated acts are a gamble because they’re a take-it-or-leave-it move: the European Parliament and EU member states can only reject or accept the proposal – they can’t amend it. They are also the most obscure EU legislative tool because they use expert committees to pass legislation. The decisions are usually technical by nature, but which can sometimes also be political. Like the taxonomy.

To be fair, the choice to use delegated acts to set technical screening criteria under the taxonomy was approved by the Parliament and EU member states in December 2019, when the two agreed on the EU taxonomy regulation

But the Commission added a layer of opaqueness with the timing of its proposal and by failing to consult the public, something it did for its first climate delegated act. There are indeed no public consultations planned for this one, a Commission spokesperson confirmed to EURACTIV.

Opponents of the delegated act are now using this as ammunition. WWF’s reaction published on New Year’s Day did not focus on the environmental organisation’s well-known opposition to nuclear and gas. It was on transparency.

“Short of digging an actual hole, the European Commission couldn’t have tried harder to bury this proposal,” said Henry Eviston, spokesman on sustainable finance at WWF European Policy Office.

“When the question was whether renewables are green, the Commission gave citizens three chances to provide their opinion. For fossil gas and nuclear, we get a document written behind closed doors and published on New Year’s Eve. If the EU is confident in this proposal, it must hold a public consultation,” he observed.

Austrian climate minister Leonore Gewessler called the move a “cloak-and-dagger operation”, a comment echoed by Luxembourg’s energy minister, Claude Turmes: “The proposal was cheated past the public last night in a cloak-and-dagger operation. That says enough about transparency,” he wrote on Twitter.

In the European Parliament, lawmakers also used the opaqueness of the procedure to try and shoot down the taxonomy. Green MEP Michael Bloss launched a petition to try and increase citizen pressure on the European Commission.

“When Ursula von der Leyen sent her proposal to the EU member states shortly before midnight on New Year’s Eve, she deliberately bypassed the European public. The whole process is thus highly non-transparent, and this with a label that is supposed to ensure transparency on the financial market,” Bloss told EURACTIV.

Technically, the European Commission was abiding by its promise to send out the taxonomy “by the end of the year” – a narrative which eventually backed the EU executive into a corner.

Asked why there is no public consultation planned, a Commission spokesperson told EURACTIV: “The relevant issues concerning natural gas and nuclear energy in relation to the Taxonomy have been in the public domain since 2020. There have been significant legislative deliberations on the Taxonomy Regulation, the work of the Technical Expert Group, and the finalisation of the first Climate Delegated Act.”

“These issues have also been discussed several times with Member States and the European Parliament. Stakeholders have submitted extensive feedback to the Commission on these activities, based on the options discussed for the first draft of the Climate Delegated Act for gas-related activities (gas-related activities were subject to a public consultation in November 2020), and on the JRC report and expert committee reviews for nuclear-related activities,” the spokesperson added.

In short, the Commission already consulted the public on the first climate delegated act and the proposal will be scrutinised by its expert group the Platform on Sustainable Finance as well as the co-legislators, the spokesperson said, before concluding: “A general public consultation of the proposal is not envisaged”.

However, the time given to EU experts to provide feedback has also been criticised. WWF, which is part of the  Platform on Sustainable Finance, has complained they were given only eight working days – until 12 January – to give a formal response to the proposal.

That deadline was extended to 21 January. But given most consultations in Brussels are at least four weeks long, it’s odd that the advisory group’s obvious lack of time to analyse the draft wasn’t foreseen.

This was never going to be an easy road for the European Commission, but it seems to have added some speed bumps of its own. And the journey is far from over: EU countries still need to analyse the draft. It’s unlikely they will have the numbers to overturn it, but we’re yet to see what Austria’s threatened court action will bring. The European Parliament too could yet prove a threat.

Whatever the outcome, there may be some lessons to learn for the European Commission, which expended a significant amount of political capital in this exercise. 

  Kira Taylor


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Welcome back!

Welcome to the first Green Brief of 2022! And what a year we have in store. We’re due lots of negotiations on climate policy, as well as yet more legislation from the European Commission and some big environmental conferences. We’ll aim to keep you up to date on all the important news, so please subscribe, and if you have any tips/ news for us, feel free to get in touch!


This week’s top stories

More stories:


While we were away

2021 was world’s fifth-hottest year on record, say scientists. Last year was the world’s fifth hottest on record, while levels of planet-warming carbon dioxide and methane in the atmosphere hit new highs in 2021, European Union scientists said. Read more.

Polish PM weighs in on ETS debate. The current concept of the EU Emissions Trading Scheme (EU ETS) is flawed. Instead of serving a sustainable and equitable climate policy, CO2 emissions trading has become a tool for speculation, writes Mateusz Morawiecki exclusively for EURACTIV. Read more.

LEAK: EU drafts plan to label gas and nuclear investments as green. 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. Read more and see the leaked draft here.

France buckles up to drive environment legislation through. President Emmanuel Macron wants to use the French presidency to promote three concrete environmental actions, he said in December. These include introducing so-called “mirror clauses” to trade deals, speeding the EU border carbon adjustment mechanism, and setting an EU instrument to combat imported deforestation. Read more.

Last minute money grab. Just days before Christmas, the European Commission published its proposal for boosting the EU budget with new own resources. That includes revenues from the emissions trading scheme and the carbon border adjustment mechanism. Read more.

Farewell to nuclear? Germany pulled the plug on three of its six remaining nuclear power stations on New Year’s Eve, another step towards completing its withdrawal from nuclear power as it turns its focus to renewables. Read more.

Meanwhile, Belgium will shut down all seven of its nuclear reactors by 2025 but will not close the door on new-generation nuclear technology, according to a deal reached Thursday (23 December) by the coalition government. Read more.

But nuclear is far from over, according to EU commissioner Thierry Breton who said in an interview published at the weekend that the European Union will need to invest €500 billion in new generation nuclear power stations from now until 2050. Read more.

Other stories:


News from the capitals 

TALLINN. Estonia aims to stabilise electricity prices. Changing the mechanism of the EU carbon market is one of several ways to stabilise electricity prices and the energy market, Prime Minister Kaja Kallas said. Read more.

ROME. Italy mulls transferring renewables incentives costs from bills to recovery plan. Italy wants to lower the prices of bills by transferring renewable energy incentive costs from bills to the national recovery and resilience plan, Ecological Transition Minister Roberto Cingolani said during a meeting with the Senate Committee on Industry on Tuesday. Read more.

WARSAW. Poland will do everything to prevent Fit for 55. Warsaw wants to build ‘a coalition of countries’ within the EU that object to the Fit for 55 climate package, which the government says will severely affect less affluent EU citizens. Read more.

BRATISLAVA. Slovakia agreed to cut down methane emissions without a plan. Slovakia promised to cut down its methane emissions by 30% compared to 2020 levels by 2030 at the COP26 climate conference in Glasgow, but it currently has no plan on how to achieve this. Read more.

ZAGREB. Croatian ministers disagree on lowering VAT on natural gas. New and higher natural gas prices for most households should enter into force after 1 April on the basis of the Croatian regulatory framework. Prices could be €500 per year more expensive. Read more.

BELGRADE. Serbian PM: Rio Tinto project has stopped. Rio Tinto’s Jadar project, subject to nationwide protests last year, has been halted because it could not be granted an exploitation field permit, Serbian Prime Minister Ana Brnabić said on Tuesday. Read more.

PRISTINA. Kosovo’s electric bills could increase two-fold. Households in Kosovo could see their electricity bills double if a proposal by the Energy Regulatory Office (ERO) is approved. Read more.

LJUBLJANA. Slovenia to exit coal by 2033. Slovenia will stop using coal for electricity generation by 2033 under the national strategy to phase out coal and restructure coal regions that the government adopted on Thursday. It is one of the last EU countries to do so. Read more.

BERN. Greens and Social Democrats announce referendum for a Swiss New Green Deal. The presidents of two Swiss political parties announced on Thursday they would join forces to launch a popular initiative to amend the constitution focusing on climate. Read more.

HELSINKI. Finnish electricity market returns to pre-pandemic levels. Electricity consumption in Finland returned in 2021 to pre-pandemic levels. The wholesale price has risen to an all-time high but remains at mid-level compared to other European countries. Read more.

BRATISLAVA. Slovakia eyes small modular reactors for nuclear future. Slovakia is interested in small modular reactors and will support discussion about this topic at the European level, said state secretary of economy Karol Galek, who again welcomed the Commission’s proposal to include nuclear energy and natural gas in the EU Taxon my. Read more.

WARSAW | PRAGUE. Poland refuses to pay fines for Turow mine, agrees to reduced payments from EU funds. The Polish government has rejected the European Commission’s order to pay outstanding fines for not complying with the EU Court of Justice’s ruling to stop the activity of the lignite mine in Turów, which was the subject of the clash between Poland and the Czech Republic. However, the government did agree to receive reduced payments from the EU budget. Read more.

SOFIA. The Bulgarian State Gas Company is under investigation. Bulgaria’s state-owned gas company, Bugargaz is under investigation for a series of potential abuses, according to new Prime Minister Kiril Petkov on Sunday. Read more.

TIRANA. Albania seeks to restart thermal power plant amid energy crisis. Albania’s state-owned electricity-producing company is planning to lease a thermal power plant from a third party in the hopes of combatting the energy emergency declared back in October. Read more.

BUCHAREST. Romanian government to discuss penalising energy companies. The Romanian government will discuss new measures to help consumers affected by the increase in energy prices and measures to force energy suppliers to redo wrongly-issued bills. Read more.

LJUBLJANA. Slovenia moves to allow low-volume fracking. Low-volume hydraulic fracturing, also known as fracking, will be allowed in Slovenia under amendments to the mining act adopted by the government this week. Read more.

ROME. Gas price hike may lead to Italian companies relocating. If the government does not provide subsidies to companies, many of them will opt to relocate, said company consortium Confindustria on Tuesday. Read more.

WARSAW. Polish government vows to scrap tax on gas. In its long-awaited second “anti-inflation shield”, the government announced its plan to cut value-added tax on fuel and introduce a zero VAT rate on goods such as basic food products, fertilisers and natural gas. Read more.

ATHENS. Greece silently admits the death of East Med project. The market and not governments decide the economic viability of energy projects, the Greek government now says a day after a US State Department statement suggested that Washington has lost its interest in the EastMed gas pipeline project. Read more.

THE HAGUE. Dutch government to be sworn in with focus on climate. Dutch Prime Minister Mark Rutte’s fourth successive coalition government will be sworn in Monday a record 10 months after elections, with pledges to spend big on climate change and coronavirus. Read more.

ZAGREB. Electricity and gas prices to increase in Croatia. The government and all its ministries are working on preventing a major blow to living standards due to higher energy prices, Prime Minister Andrej Plenković has said. Read more.

TALLINN. Estonia develops its first offshore wind farms. Estonia, which has a reputation for being one of Europe’s dirtiest electricity producers, is now looking at the energy transition, including offshore wind. Read more.

SOFIA. Bulgarian greenhouses shutting down due to high gas prices. Nearly 70% of all greenhouses for vegetable production have stopped producing in the winter due to high gas prices, the Association of Greenhouse Producers told state radio and television. Read more.

WARSAW. Polish miners threaten energy crisis if wage demands go unmet. Polish miners established a schedule for further protests, announcing a two-day strike referendum on 12-13 January and a blockade of coal shipping from 17 January until further notice. Read more.

BUCHAREST. Romania wants new electric power plants. The top priority is creating new facilities for electricity production in Romania, Energy Minister Virgil Popescu told a TV news station. “We want to launch in March a call for solar and wind projects – €460 million for 950 megawatts,” he said. The minister also mentioned that many other projects, including natural gas and hydrogen distribution networks, hydrogen production, battery making facilities, would be launched this year. (Bogdan Neagu | EURACTIV.ro)

TIRANA. Albanian hydropower plant gets Chinese backing. A stalled hydropower plant project has received Chinese backing, signalling work could soon be underway in an area of outstanding natural beauty popular with tourists. Read more.

VIENNA. European Greens considering suing Commission over taxonomy rules. The European Greens are currently assessing whether to follow the Austrian example and sue the European Commission over the EU taxonomy rules that could label nuclear energy and gas as ‘green’ energy sources. Read more.

WARSAW. Polish justice minister calls on Warsaw to block EU’s insane climate package. The EU’s “insane climate policy” must be rejected for electricity bills to fall, said Poland’s Justice Minister and leader of Solidarna Polska, Zbigniew Ziobro, on Twitter. Read more.

BRATISLAVA. Slovakia first country in region to adopt deposit scheme for plastic bottles. Slovakia has become the first country in Central Europe and only the eighth country in the EU to introduce a deposit system that means people can return undamaged plastic bottles to supermarkets. Read more.

BELGRADE. Many Serbian cities do not have automatic air pollution monitoring systems. Denial of excessive air pollution at all levels of the Serbian administration has further delayed the implementation of appropriate measures, the National Environmental Association (NEA) said in a press release. Read more.

SARAJEVO. Republika Srpska government embarks on harmful energy project with Chinese investor. The government of the Serb entity of Bosnia and Herzegovina, Republika Srpska (RS), has signed a contract with a Chinese investor to construct another hydroelectricity plant on the Trebišnjica River in eastern Herzegovina, although the project is an ecological hazard that could seriously threaten the Neretva River. Read more.

PRISTINA. Kosovo bans crypto-mining amid energy crisis. The government of  Kosovo has decided to ban cryptocurrency mining as the country faces some of the worst power shortages in its history this winter. Read more.

COPENHAGEN. Denmark promises ‘green’ domestic flights by 2030. Domestic flights will be “completely green” by 2030, Prime Minister Mette Frederiksen said in her New Year’s speech, adding that flying will become more expensive in the future. Read more.

PRAGUE. Pro-nuclear Prague concerned about nuclear going green in EU taxonomy. The European Commission’s proposal to label gas and nuclear energy as “transitional” or “green” investments was firstly welcomed by pro-nuclear Czechia. Czech stakeholders, however, have warned that the criteria set by the EU taxonomy is too strict and could even bring major complications for the Czech energy sector’s transformation. Read more.

BRATISLAVA. Slovakia applauds EU taxonomy, expects to use gas after 2050. The Slovak government is excited about including gas and especially nuclear projects in the sustainable finance taxonomy. Read more.


News in brief

Steel lobby concerned by lawmakers’ ETS amendments. The reform of the emissions trading scheme (ETS) and the implementation of the carbon border levy (CBAM) needs better coordination, a spokesperson for the European steel association Eurofer told EURACTIV. This is needed to make sure that Europe’s climate goals are achieved through innovation rather than leaking emissions to third countries, they said.

European Parliament lawmakers are currently drafting their amendments to the Fit for 55 climate package that came out in July last year, but the steel industry is warning against taking away its free permits to pollute that protect businesses from high carbon prices.

“The CBAM draft report by MEP Mohammed Chahim exacerbates the already worrying shortcomings of the Commission proposal, since it accelerates significantly the free allocation phase out without any concrete solution for exports and does not contain stronger anti-circumvention provisions,” their spokesperson told EURACTIV.

The steel industry also raised concerns about the draft report on ETS reform, saying that, while it acknowledges the risks associated with CBAM, the proposal to protect industry would “not be sufficient to fix the damage”. (Kira Taylor | EURACTIV.com)

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UK government sued over climate strategy. The environmental NGO ClientEarth is taking the UK government to court over its net zero strategy, saying it does not have credible policies to tackle climate change. According to ClientEarth, the UK government has breached its legal obligations under the Climate Change Act to demonstrate its policies will reduce climate-killing enough to meet the country’s legally binding goals.

“It’s not enough for the UK Government simply to have a net zero strategy, it needs to include real-world policies that ensure it succeeds. Anything less is a breach of its legal duties and amounts to greenwashing and climate delay,” said ClientEarth senior lawyer Sam Hunter Jones.

In response to the case, The Guardian reported a government spokesperson saying: “The net zero strategy sets out specific, detailed measures we will take to transition to a low carbon economy, including helping businesses and consumers to move to clean and more secure, home-grown power, supporting hundreds of thousands of well-paid jobs and leveraging up to £90 billion of private investment by 2030.” More from EURACTIV’s media partner, The Guardian Environment, here.

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EU talks on joint gas buying make progress. EU member states could agree on joint gas procurement in a move aimed at safeguarding the bloc’s economy from soaring prices, Italian Prime Minister Mario Draghi said on 10 January.

Among the options were for groups of countries to buy gas together and jointly stockpile gas reserves. “The discussion continues, very actively, within the European Council” bringing together EU heads of states of governments, he told a news conference.

Draghi also repeated a previous suggestion that companies which had benefited from spiking prices should face additional taxes. “Those who have made huge profits from this gas price increase should be asked to share these profits with the rest of society,” Draghi said. (EURACTIV.com with Reuters).


Opinions


Upcoming events

3 FEBRUARY. EU methane regulation: how can policymakers raise ambition? Join James Watson of Eurogas and Dagmar Droogsma from the Environmental Defense Fund to discuss how the EU can tackle energy sector methane emissions and reach its 2030 climate targets and the 2050 climate neutrality goal. Speakers include. Programme and registration here. (Supported by Environmental Defense Fund)

9 FEBRUARY. Green steel: CBAM and ETS – do their current designs aid EU climate ambitions? Join this EURACTIV Virtual Conference to discuss the impact of the CBAM and ETS mechanisms on the steel industry. Programme and registration here. (Supported by Eurofer)

22 FEBRUARY. (Re)constructing Europe: What challenges are Member States facing? The EU’s post-pandemic Green Recovery is laying the foundations for a new understanding of buildings and construction processes. The Commission aims to at least double building renovation rates in the next ten years and make sure renovations lead to higher energy and resource efficiency. Join this EURACTIV Virtual Conference to discuss the new economic and environmental challenges for the construction sector, particularly for South-Eastern Europe. Programme and registration here. (Supported by Glavbolgarstroy)


On our radar

20-22 JANUARY. Informal Environment Council.

15 FEBRUARY. Proposal on sustainable corporate governance (tbc)

17 MARCH. Environment Council.

23 MARCH. Nature protection package: Revision of rules around sustainable use of pesticides and nature restoration targets.

30 MARCH. Circular economy package 1:

  • Sustainable products policy initiative, including a revision of the Ecodesign Directive
  • Review of the Construction Product Regulation
  • Proposal for a Regulation on substantiating environmental claims using the Product/ Organisation Environmental Footprint methods (green claims)
  • Strategy on sustainable textiles
  • Empowering consumers for the green transitition 

5 APRIL. Emissions and pollutants package:

  • Revision of the Industrial Emissions Directive and update of the European Pollutant Release and Transfer Register (E-PRTR)
  • Review of EU rules on fluorinated greenhouse gases
  • Regulation on substances that deplete the ozone layer
  • Development of post-Euro 6/VI emission standards for cars, vans, lorries and buses 

27 APRIL. New strategy on international energy engagement (tbc) 

27 JUNE. Energy Council.

28 JUNE. Environment Council.

20 JULY. Circular Economy Package 2:

  • Policy framework for bio-based, biodegradable and compostable plastics
  • Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
  • Review of the Urban Wastewater Treatment directive

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