The introduction of the taxonomy is a great success for us Greens, future-oriented companies and civil society forces working on it for years. But the credibility of the taxonomy is crucial for its success. And fossil gas and nuclear power are neither ecologically or economically sustainable nor climate friendly energy sources.
Some very short time before the new year 2022 – and in the middle of the Parliament’s winter break, the EU Commission has come up with a proposal that rings all alarm bells and sets a fatal sign for climate protection in the European Union contradicting the Green Deal.
The European Commission has proposed to declare the generation of electricity from nuclear power and fossil natural gas as sustainable economic activities under the EU taxonomy, which was supposed to be the gold standard in determining which economic activities are sustainable and which are not. This gold standard should provide investors with an incentive to re-direct public but especially private capital to sustainable projects.
If the current proposal is adopted, large institutional investors but also small private investors who put money into so-called “taxonomy-aligned” products, e.g. investment funds would potentially promote and support wind power equally as much as nuclear power.
It also means that subsidies and grants, i.e. taxpayer money could be used to sustain and even expand those inherently unsustainable economic activities.
The main purpose of the Taxonomy is often confused in the public debate with some member states short- and medium term reliance on nuclear and natural gas capacities to reduce CO2 emissions.
The fact that electricity generation from natural gas is less CO2 intensive than coal and that
the generation of electricity through nuclear fission has a relatively low carbon footprint does not make automatically those activities sustainable. In addition, methane often escapes during the extraction and transport, a climate gas that is not as durable as CO₂, but has a much stronger effect.
Just as a reminder: The original idea of the Taxonomy is that in order to be recognised as sustainable, an economic activity has to contribute to one of the six environmental objectives: Climate change mitigation, climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. However, the respective economic activity not only has to contribute to one objective but on top of that may not harm any of the other 5 objectives. This is called the ‘Do no significant harm’ principle (DNSH).
The most outstanding negative example in this regard is nuclear power. While it might be true that the generation of electricity from that source is producing few carbon emissions, it is at the same time also producing one of the most polluting substances, namely radioactive waste, thus harming the 5th environmental objective ‘pollution prevention’. Labeling nuclear energy as sustainable is just wrong with its high-risk technology having long-term effects on the environment. The highly radioactive nuclear waste will pollute for centuries.
The now proposed requirement that for every new nuclear power project there needs to be a “plan” on how to dispose high-level radioactive waste by 2050 only points to the fact that there are no good long-term solutions to this problem. Notably, this very weak requirement is even softened for projects at existing nuclear power plants that are authorised before 2025. Thus, it is clear that the inclusion of nuclear power violates the core-principle of the EU Taxonomy Regulation.
Additionally, we have the case of natural gas. In the Commission’s current proposal new fossil gas fired installations that emit less than 270g CO2 per MWh could be labelled as sustainable. While being significantly less CO2 intensive than coal they would still be up to 10 times as CO2 intensive as renewables, such as wind solar or hydropower. Heavy investments in such an infrastructure can result in lock-in effects and be seen in direct opposition to the EU climate neutrality targets.
The 27 member states now have to give their feedback to the Commission proposal until the 12th of January. In order to object the corresponding proposal, it needs a “qualified majority“ in the Council.
Until now member states have reacted very differently. Parts of the new German Government have criticized the EU Commission’s plans. Austria has even announced to sue the Commission possibly referring to the DNSH principle and three categories of the Taxonomy while other countries like France, Poland and Rumania among others pushed for the labeling of nuclear energy as green investment in the Taxonomy.
Under such circumstances, the European Parliament might be the best hope to oppose this current commission proposal. Instead of the European Commission plans to promote additionally outdated energies, the EU should put all its efforts in the accelerated expansion of renewable energies, energy storage and energy efficiency solutions to implement the Green Deal.
Instead of making way for the greenwashing of public and private investments into non-sustainable energy sources, the EU should work towards innovative and green technologies leading towards a climate-neutral and decarbonized European economy at 2050 at the latest.
We have an outstanding issue here: A true EU gold standard for sustainable investments is not only important for achieving our own climate ambitions but also for setting an example at global stage.
If in the next few years a significant share of global capital is invested in truly sustainable economic activities, chances to achieve at least the Paris Climate targets would be drastically improved. We should not waste that chance.
The EU has the unique opportunity to take the lead in protecting the climate and environment. We have to find a compromise that respects the sovereignty of the member states for their energy mix while not damaging the credibility of the Taxonomy.
