Esther Bollendorff and Olivier Vardakoulias are policy experts with Climate Action Network (CAN) Europe.
Earlier this week, the European Parliament adopted the Delegated Act on Taxonomy classifying fossil gas and nuclear as “green” activities for private investors.
This highly controversial act developed by the European Commission, pushed by French President Emmanuel Macron, and supported in early stages by German Chancellor Olaf Scholz illustrates how politics can overrule science.
Neither fossil gas nor nuclear power are green or sustainable energy sources. Producing and burning gas emits carbon dioxide and leaky methane, a powerful greenhouse gas with a warming potential bigger than carbon dioxide.
Building and dismantling nuclear power plants is expensive, and plants can take 15 years or more to be built. New nuclear plants cannot deliver on the emissions reductions we need today.
Crucially, there are no “sustainable” options to nuclear waste, and across its supply chain nuclear power is undermining the EU’s and international biodiversity and circular economy objectives.
The gold standard for greenwashing?
The private financial world is currently a “wild west” whereby numerous private classification systems label as “green” investments and activities with dubious climate impacts.
For shifting finance away from climate destructive activities, while mobilising additional investments for a swift energy transition, having a clear public classification which defines what constitutes genuinely “green investments” is a sine qua non.
This is precisely what the EU Taxonomy regulation initially set out to do. Instead, by labelling fossil gas and nuclear as green, it is becoming a greenwashing tool.
A delegated act is supposed to be a technical document, complementing primary law. In this instance, it turned out to be a highly political paper instrumentalised to defend strong industry lobbies and narrow national interests.
Namely, that includes securing private finances for replacing the ageing French nuclear power fleet, whose 56 reactors supply 70% of the country’s power consumption. The initial deal was also done in consensus with Germany, allowing the country to feed its gas guzzling industry.
At the same moment that lawmakers voted on the Taxonomy Act, France announced a full public takeover of its major energy utility Electricité de France (EDF). Initially, Macron intended to open shares to private investors but given the poor state of the power fleet, he changed strategy to turn EDF into a 100% state owned company.
However, on top of public support, private money needs to be attracted to invest into the expensive renewal of the French nuclear power fleet, explaining why the EU Taxonomy is so important for France.
The greenwashed proposal finally failed to rally sufficient critical voices from members of the European Parliament (MEPs).
However, a significant number of 278 members, some 40% of the plenary, expressed their disagreement. This was notably an outcome of broad civil society mobilisation including large citizens groups, faith groups, Ukrainian MPs and scientists, former EU officials, and not least the financial community which deemed the fake green label obsession as “utter nonsense“.
Ultimately, the European Commission needs to acknowledge that its greenwashed proposal is supported by the far-right spectrum of the Parliament as well as right-wing conservatives of the European People’s Party.
Social Democrats, Greens, Left and a proportion of Liberals have widely opposed the inclusion of fossil gas and nuclear in the taxonomy.
Who wants to invest in expensive gas?
For almost a year gas spot market prices have been rising dramatically as the war develops and as, unsurprisingly, Vladimir Putin uses fossil fueled energy as a weapon. Indeed, Russian officials and companies made no secret of their support for including fossil gas in the EU’s green taxonomy.
But even if fossil gas is now included in the green taxonomy it is highly questionable whether private institutions are really interested in investing in a fake green technology, fooling their clients on the one hand but equally making them vulnerable to considerable financial risks.
Those financial institutions that are genuinely committed to align their portfolios with the Paris Agreement and the goal of limiting temperature rise to 1.5 degrees Celsius are unlikely to keep investing in fossil gas, regardless of how the EU Taxonomy labels gas.
See you in court
Sensible people and organisations are not yet done with this decision.
Growing awareness-raising on the taxonomy has rallied strong civil society support but also the support of member states and MEPs that do not accept this scam.
As such, we will not stop here, but challenge the act in the European Court of Justice.