Brussels offers a green label for nuclear and natural gas

Brussels wants to recognize nuclear energy and forms of natural gas as a “green” activity under a historic European classification system to help financial markets decide what matters as a sustainable investment.

In long-awaited plans, the European Commission has paved the way for investments in new nuclear power plants for at least the next two decades and natural gas for at least a decade, under a green label scheme known as the name of “taxonomy for sustainable finance”.

The labeling system, which will cover industries that generate around 80 percent of all greenhouse gas emissions in the EU, is the first attempt by a major global regulator to decide what counts as genuinely sustainable economic activity and help eradicate so-called greenwashing in the financial sector.

A draft legal text, seen by the Financial Times, says the EU’s green label should be awarded to controversial energy sources, including nuclear power and natural gas under certain circumstances.

The move came after a vocal group of pro-nuclear countries, led by France, and pro-gas governments in southern and eastern Europe, called for taxonomy not to punish sources of energy that provide most of their electricity production.

Nuclear power does not emit greenhouse gases, but produces toxic waste that requires safe disposal and may present radiation hazards. Natural gas produces carbon dioxide, but its supporters say it is much less polluting than traditional fossil fuels and is a key way to help reduce emissions.

Brussels was forced to delay a decision on how to classify the two energy sources earlier this year after disputes within the College of Commissioners over whether to award them the green label. The battle to recognize nuclear power and natural gas as green has intensified in recent months as EU countries have faced record-breaking electricity prices this winter, driven by growing demand for electricity. imports of natural gas.

The draft taxonomy text states that nuclear energy should be considered a sustainable economic activity as long as EU countries that host power plants can safely dispose of toxic waste and meet a criterion causing “none. significant damage ”to the environment. The construction of new nuclear power plants will be recognized as green for the permits granted until 2045, specifies the text.

Investment in natural gas is also included in the green label as a “transitional” energy, but must meet a more detailed set of conditions, including producing emissions below 270g of CO2 per kilowatt and s’ it replaces traditional fossil fuels such as coal production.

The EU imports around three quarters of its natural gas needs, most of which is supplied by Russia. The bloc’s energy crisis has drawn criticism from some member states that Moscow is artificially pushing up gas prices and the EU should speed up the move away from gas imports to renewables.

The taxonomy text will need to be approved by a majority of EU member states and members of the European Parliament. EU diplomats have said the text is likely to gain broad support from governments, but the green classification for gas and nuclear has been criticized by environmental groups.

French European Commissioner Thierry Breton said he was in favor of labeling both technologies as green, as this would help the EU meet its goal of reducing CO2 emissions to net zero by 2050, compared to 1990 levels.

“Gas is not the best for achieving our goal because you generate CO2, but at least it’s better as a transition than coal,” Breton told reporters last month. “We need to have the right funding in taxonomy, including nuclear power.”

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