The European Union has disregarded almost all criticism and protests, presenting its proposal for a 'taxonomy' to allow sustainable investments. To overturn it would require a majority in the European Parliament or that more than 20 countries openly oppose it. The EU has deemed nuclear energy and gas as green, at least as far as investments are concerned. After months of intense disputes, threats, and complaints from different governments and the European Parliament, the European Commission has presented a delegated act with the so-called taxonomy proposal this past Wednesday. The set of criteria for the classification of all activities that may be defined as "sustainable" from the climate point of view to qualify for investments. It has done so ignoring the complaints and with minimal cosmetic changes to the initial idea outlined just a few weeks ago. The EU needs such a classification, especially since in cases such as the European Pandemic Recovery Fund, which provides for up to 800 billion euros in jointly issued debt, at least 40% of the resources are required to support the green transition. Countries such as France demanded that nuclear power be considered 'green', in the sense that despite the problems of highly hazardous waste, its production does not contribute to carbonization, and therefore helps the very ambitious emission reduction targets that the Union has set for 2030 and 2050. Other countries, on the other hand, wanted to keep gas, for various reasons. And in between were those who consider both outrageous and a betrayal, because it is a zero-sum game and any euro that goes to nuclear or gas will not go to renewables. "Our mission and obligation is climate neutrality. We need to act now if we are to meet our 2030 and 2050 targets. Today's Delegated Act is about accompanying the EU economy in the energy transition, a just transition, as a bridge to a green energy system based on renewable energy sources. It will accelerate much-needed private investment, especially in this decade. With the new rules we are also strengthening transparency and disclosure of information, so that investors make informed decisions, thus avoiding any 'greenwashing'"; assures Vice President Valdis Dombrovskis.
The taxonomy doesn’t guide the energy use of any country, it simply guides investors. But the political and philosophical impact of the decision is not negligible. The goal is to accelerate the transition by drawing on all possible solutions to help us achieve our climate goals.
Taking into account current scientific advice and technological progress, the Commission considers that private investment in nuclear and gas activities has a role to play in the transition.
The Commission presented its draft text last December 31st at midnight and has listened during the month of January to reactions from capitals, some of them very angry. Luxembourg, perhaps the most vocal member, believes it is unacceptable, a disgrace, and threatens protests, votes against or legal action because it repudiates both the substance and the form, the process chosen to move it forward.
Countries such as Denmark, Sweden and the Netherlands, as well as Spain, are also opposed, but since it is a delegated act, it will require at least 20 countries representing at least 65% of the population of the Union to stop the development in the Council. Delegated acts are non-legislative acts adopted by the European Commission that serve to amend or supplement non-essential elements of the legislation, and are often used when legislation is regularly adapted to take account of technical or scientific progress.
The system is that the Commission proposes and then the Council (government ministers) and Parliament must decide. The European Parliament, which is being most critical of the idea, would need an absolute majority to stop it as well, and it seems complicated. "It is a balanced compromise," said the Commission.
The pressure from the nuclear industry has been very strong, too much for them. That of gas, too, and more so at a time of crisis over the price of energy. The initial proposal confirmed the sustainable label for nuclear power plants that are currently operational, but also for those to be built until 2045. Gas-fired power plants would have the same treatment, but in principle only until 2030 and for those that emit less than 100 grams of carbon dioxide (CO2) per kilowatt-hour.
The European Taxonomy regulation, which has been in force since April but did not mention nuclear or gas, lists six environmental objectives (fight against global warming, circular economy, protection of the aquatic environment and marine reserves, air and soil pollution and protection of biodiversity).
The idea of a green investment classification is to define to what extent an economic activity that wants to be considered sustainable "contributes substantially" to the achievement of at least one of these six objectives, but without causing "significant harm" to the others.