EU lawmakers have voted narrowly in favour of legislative amendments which will reclassify nuclear and gas energy as green activities under the bloc’s influential green taxonomy. A total of 328 MEPs voted in favour of the changes while 278 voted against – 75 fewer votes than required to force a return to the negotiating table.
Hopes of forming a cross-party coalition to reject the amendments evaporated last night after the largest parliamentary grouping, the centre-right European People’s Party, confirmed that it would vote in their favour.
However, E3G adviser Tsvetelina Kuzmanova said that the justifications given by MEPs supporting the amendments suggested a poor understanding of their implications.
“According to our analysis, only a handful of member states will currently be able to access financing for gas and nuclear under the proposals,” she said. “It is ironic that many Central and Eastern European MEPs have supported the proposals, given that they will not get any benefit from it and have the most to lose from increasing EU dependency on Russian gas and uranium exports.”
The vote is a victory for the European Commission, which staked considerable political capital on the success of the amendments in the face of vocal and sustained criticism. In the six months since the proposals were published, the Commission has been accused of capitulating to pressure from pro-nuclear France and other member states, and of rushing through the changes in defiance of procedural norms.
MEPs have said they felt “sidelined” following the Commission’s decision to dispense with a public consultation and impact assessment, which would have considered how the amendments would affect bloc-wide emissions and green investments among others.
More broadly, critics – who include the commission’s own taxonomy advisers – have slammed the changes as a political compromise which is fundamentally inconsistent with the green taxonomy’s science-based approach and will impede its ability to incentivise a transition away from polluting fuels.
In response, the commission has maintained a spirited defence of the role of nuclear and gas within the green transition. EC Commissioner Mairead McGuinness pledged yesterday in front of MEPs that there would be “no greenwashing. Instead, she said, “it will be crystal clear for investors as to what investments are contained within financial products”. MEPs may also have been swayed by a last-minute intervention from Kyiv, which positioned both energy sources as key to Ukraine’s sovereignty.
‘Painful and shameful’
Paul Tang MEP, the EU green bond standard and taxonomy co-rapporteur, described the vote as a “a painful and shameful setback” which would “institutionalise greenwashing at an unprecedented scale”.
“I still strongly believe the Commission overstepped the mandate given to them by the Taxonomy Regulation,” he said. “They have abandoned the principle of technological neutrality by giving gas preferential treatment and failed to follow their own standards of good policymaking by pushing these political decisions through the backdoor.”
Sirpa Pietikäinen, the other taxonomy co-rapporteur, told Responsible Investor that while the vote might seem like a victory for the Commission today, nuclear and gas providers would only be required to make their processes less polluting by 2035 and 2050 respectively, which would cause future uncertainty for financial markets. “Delaying the problem will only make it twice as bad,” she said.
The proposals do not currently include any mechanism to insulate investors from potential financial and legal repercussions arising from the failure of nuclear and gas producers to meet these conditions.
Greens MEP Michael Bloss said: “It’s a bitter day for a those who are fighting for science-based policies and protecting the climate – in the end, the nuclear and the gas lobby was stronger. I believe this will harm the taxonomy’s credibility and its adoption by investors.”
Today’s vote means that the Commission has ticked all the boxes required to change the taxonomy legislation – it is unlikely that member states will veto the amendments having lobbied in their favour – but legal challenges from a number of member states and environmental NGOs are still on the table and could further draw out the process.
Barring this, the amendments will enter into force from January 2023.