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.
Montel 21st Jan 2022 read more »
An EU proposal to label nuclear power and some natural gas as sources of green energy has come under fire from experts hired by Brussels to help draw up the sustainable investment rules. The group of scientists want Brussels to amend its so-called “taxonomy on sustainable finance” to limit use of gas and nuclear energy or risk undermining EU climate goals. Environmentalists and some member states have already criticised the EU over the draft plan, which will allow nuclear energy and some forms of natural gas to be considered as sustainable for decades. The designation is part of rules designed to guide investment into green activities. In a document seen by the Financial Times the expert group that has helped to design the taxonomy over the past three years wants Brussels to deny a green label to electricity produced from natural gas that produces more than 100 grammes of CO2 per kilowatt hour. That is compared with more than 550kg/kWh annually over 20 years allowed in the draft. Natural gas has a lower carbon footprint than coal but still produces CO2. It can qualify for the green label if it is used to switch from coal. The stance will heap pressure on Brussels to amend the taxonomy in the face of a scientific and political backlash. The feedback will be sent to the European Commission on Friday as part of a consultation between Brussels, member states and experts on the rules. The text is due to be finalised this month. The experts add that in its current form, the taxonomy would “not be suitable” in helping to classify sustainable finance products. The scientific criticism will embolden anti-nuclear countries like Austria and Luxembourg which have vowed to sue the commission at the European Court of Justice if the taxonomy is approved in its current form.
FT 21st Jan 2022 read more »