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Four EU nations reject gas, nuclear in green taxonomy

Policy

21 Jan 2022 07:44

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Brussels

21 Jan 2022 07:44

(Montel) Austria, Denmark, Luxembourg and Spain continue to reject natural gas and nuclear in the EU’s sustainable finance taxonomy, their energy and climate ministers have said in response to a recent draft proposal.

The European Commission’s proposed conditions under which investments in natural gas-fired and nuclear power plants would be deemed “green” in a draft updated taxonomy sent “the wrong signals to financial markets and seriously risks being rejected by investors,” the ministers said late on Thursday.

The taxonomy aims to help investors identify suitable projects that support the EU’s climate goals. It does not require investments in projects that meet the criteria nor prohibit investments in projects that do not.

The ministers argued, however, that the long lifetimes of natural gas and nuclear plants meant that including them in the taxonomy could lock in their use for many decades and divert investments away from renewables.

They also criticised conditions based on “future promises”, which for natural gas included a timeline to switch to low-carbon and renewable gases, and for nuclear included a plan for dealing with high-level radioactive waste by 2050.

Next steps
The EC plans to adopt the draft updated taxonomy after it has received feedback from expert groups, which is due by the end of Friday.

One of these groups, the EU Sustainable Finance Platform, wants the EC to deny a green label to natural gas-fired plants emitting more than 100 grammes of CO2 per kilowatt hour, according to a document seen by the Financial Times.

The EC had proposed conditions where exceeding this would still qualify as green, such as having average annual emissions below 550kg CO2/kW for energy output over 20 years.

The European Parliament and EU Council of ministers then have to examine it. If neither object within a certain time – up to six months – the EC can make the updated taxonomy binding.

The parliament and council cannot amend the taxonomy updates and it can only reject or accept them as a whole.

The council would need at least 20 countries representing 65% of the EU’s population against the proposed updates to reject them, while the parliament would need a simple majority, which means at least 353 MEPs

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