Nuclear and Gas Included in the EU Taxonomy

The European Commission found a compromise on the inclusion of nuclear and fossil gas in the Taxonomy Regulation.
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In a final year-end push, the European Commission included nuclear energy and natural gas in the draft Delegated Act to the Taxonomy framework, sent out to EU countries on the 31st of December. As a result, both sources are now labelled green for investment purposes.

At the time of publication of the first Delegated Act, nuclear and gas had been excluded due to concerns regarding the safe disposal of nuclear waste and the carbon footprint of gas. Now, however, in absence of other economically feasible alternatives, the Commission has recognised both energy sources as transitional economic activities that can contribute to accelerate the Union’s path towards net-zero by 2050 without locking in innovation and investments in alternative energy sources. The main amendments to the first Taxonomy Climate Delegated Act are to be found in article 1, while criteria and conditions are part of subsequent annexes.

Nuclear

Nuclear energy production should qualify as “sustainable” if the host country can ensure the presence of sound disposal plans, funds and facilities that cause no significant harm to the environment. This applies to all “new nuclear installations for which the construction permit has been issued by 2045” the text says.

Natural Gas

Natural gas is entitled to the label of green investment within the EU Taxonomy framework for a limited time span and provided certain criteria, such as a carbon dioxide emission level of 270g of CO2 per kilowatt generated, are met. At the same time, gas facilities’ construction will be allowed just until 2030 to support the green transition and the replacement of more polluting fossil fuel plants.

The EU Platform on Sustainable Finance, tasked with providing feedback on the draft Delegated Act, opposed the inclusion of gas and nuclear in the EU Taxonomy. In a report released on Monday, the platform said these type of investment are “not suitable for green, sustainable finance products or instruments in the market”. Advisers suggested the creation of an extended Taxonomy with an intermediate performance space (or Amber zone) to avoid misleading investors by giving out a green label that would put nuclear and gas on a par with technologies like renewable energy.

What Comes Next

The Commission will present the amendment of the EU Taxonomy to the European Council and Parliament, which will have from four to six months to decide whether to oppose it or not. If it is not blocked, it will become EU law.

What does this mean for your company?

CSR Europe will prepare its members to take advantage of the regulatory changes brought about the EU taxonomy during the three-part Atelier series and exclusive EU Policy update webinars.

Registrations are now open for the:

1. Ateliers (corporate members only)