Nov 30

EU Advisors to Oppose Proposed Green Labels for Nuclear, Gas: Reuters

Stephen Bierman
Jan 21, 2022
Image: Ivo Lukacovic via Unsplash.

European Union expert advisors on green investment rules will warn lawmakers against proposals to label gas and nuclear energy as sustainable, Reuters said, citing a document.

The advisers are set to give feedback to the European Commission on Friday on its draft plan for the EU’s “sustainable finance taxonomy”, which includes a list of economic endeavors that can be labelled as green investments.

Rules proposed by the EC would hand out green labels to investments that don’t significantly help fight climate change, according to the expert advisers. They will suggest that the EU should discard part of its proposals for natural gas plants.

The Chair  of the group of advisers declined to comment to Reuters concerning the draft.

Current proposals would give gas plants a green label until 2030 if they meet criteria including an emissions limit of 270g of CO2 equivalent per kWh, or if their annual emissions average 550kg CO2e per kW or less over 20 years.

Natural gas produces about half the carbon emissions of coal when burned in power plants, but is also associated with leaks of methane, a potent greenhouse gas.

Only gas plants with emissions of 100g CO2e per kWh or lower should be given a climate-friendly label, the advisers will say.

“This is the science-based approach,” said the document, according to Reuters, which could change before it is published. Today’s gas plants do not meet that limit, and would need to use carbon-capture technology to comply.

The EU’s advisers have long recommended the 100g limit, which they say reflects the fast emissions cuts needed to avoid disastrous levels of global warming.

On nuclear power, the advisers said the rules proposed by the Commission “should not go forward” because they do not ensure nuclear plants would not significantly harm the environment, citing concerns about nuclear waste disposal.

The feedback sets the stage for the Commission to publish a final proposal for gas and nuclear rules. It is not obliged to alter its proposal in response to the advisers’ opinions, Reuters said.

A majority of EU countries or the European Parliament could block the rules, but they cannot make changes to them.

The EU taxonomy aims to set a unified standard for green investments, helping investment see its way to climate-friendly projects. It also seeks to keep investors and companies from overstating their eco credentials.

A first set of rules covering green investments in sectors including buildings and transport took effect this year, the Reuters report said. Rules on gas and nuclear are mired in intense political disagreement.

Spain, Denmark, Austria and Luxembourg on Thursday published a letter to the Commission urging it not to label gas and nuclear power as green.

“This draft sends a wrong signal to financial markets and seriously risks being rejected by investors,” the letter said.

Other states, including France, are in favour of nuclear, while some eastern and central European countries say gas should be promoted to help them close more polluting coal plants.

Stephen Bierman

Stephen Bierman is a finance and energy reporter with over 15 years of experience, including at Bloomberg News and Energy Intelligence.

Tweets at: @StephenBierman1

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