The group of independent experts convened by the EU to advise on the development of the green taxonomy have warned against passing draft legislation which would reclassify nuclear and some natural gas activities as eligible for sustainable financing under the taxonomy framework.
According to feedback from the Platform on Sustainable Finance, delivered to the Commission on Friday night and published earlier today, nuclear and gas “could not be considered sustainable” under the original remit of the taxonomy and its inclusion could pose “a serious risk … undermining the sustainable Taxonomy framework”.
Both nuclear energy and the gas activities covered by the latest proposals are in contravention of key science-based thresholds under the taxonomy which prohibit activities harmful to the environment, the Platform said, due to the emissions of fossil gas – including methane – and nuclear waste byproducts. In addition, the amendments could result in the lock-in of carbon intensive assets if taken forward, the Platform noted.
Instead, the Platform has suggested that gas-related activities which are not aligned to the taxonomy’s threshold could be included in a proposed extended ‘amber’ taxonomy, covering intermediate activities which are neither green nor harmful, which it expects to publish in the coming weeks. A similar workaround was not proposed for nuclear.
“Now is not the time to blur the lines on the environmental realities of climate neutrality,” said Platform chair Nathan Fabian today. “For the Taxonomy to be useful, it must be environmentally robust when describing the economic choices ahead of us.”
It comes after the EU published draft legal text which would label as green gas-related activities with a carbon intensity of 270g CO2e/kWh, far exceeding the taxonomy’s original 100g CO2e/kWh life-cycle threshold, and nuclear energy. The plans are backed by some EU member states, such as France, who fear that the bloc’s green financing rules would put natural gas and nuclear – upon which their economies are reliant on – at a disadvantage.
The plans are opposed with equal vigour by other member states, such as Germany and Austria – the latter which has declared plans to challenge the amendment in court, and NGOs who say that it will undermine the integrity of the EU’s sustainable finance ambitions.
The European Commission will now take into account the feedback from the Platform and other member states, via a separate consultation which closed last week, before formally adopting the amendments – tentatively by the end of January. Member states and the parliament will subsequently have four months to put forward objections before it enters into force.
Sebastien Godinot, an economist with WWF and a member of the Platform, said to RI that ignoring the Platform’s feedback was “not a good way forward” for the EU as it would “empower many stakeholders to further raise criticisms against the final Act”, such as through parliament.
He said: “Attempts have been made to stifle the science, but today the Platform has given it a megaphone: fossil gas generates huge emissions, and nuclear power creates highly radioactive waste which we still don’t know how to handle. The Platform’s report is another warning bell that neither fossil gas nor nuclear power must enter the EU green taxonomy.”
However, commentary released by French sustainability-focused manager Natixis has backed the amendments, describing them as “politically sound and scientifically tolerable in its foreseeable effects” and as likely to pass.
The Commission did not respond to questions on whether it would be likely to factor in the Platform’s conclusions and whether the proposed amendments are still on track to be adopted by the end of the month.