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Aug 16
2022

EU Sees Role For Nuclear Power, Natural Gas In Carbon Cutting Efforts

Stephen Bierman
Jan 10, 2022
Image: Frédéric Paulussen via Unsplash

The European Union has included natural gas and nuclear energy in taxonomy proposals to cut carbon emissions. This marks a pragmatic approach that will boost the odds of hitting the bloc’ climate change aims.

Natural gas and nuclear power have been subject for debate due to their less than perfect green credentials. But Europe has limited options as it takes aim at removing its main carbon offender — coal. Wind and solar projects, while growing, are not yet mature enough to bear all utility demand. And power demand itself is set to grow with greater electric-based transport. 

“Taking account of scientific advice and current technological progress, as well as varying transition challenges across Member States, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” the European Commission said in a January 1 statement.

The European Union seeks to be a leader in renewable energy generation as part of its push to fight global warming and achieve carbon neutrality. The moves are part of a growing global consensus around the need to address climate change, reflected most clearly by the participation of the world’s major industrial nations in COP26 talks on climate change late last year.

The EU explains its taxonomy as a science-based transparency tool for companies and investors. It creates a common language for use while investing in projects and economic activities that have a substantial positive impact on the climate and the environment. It will also introduce disclosure obligations for companies and financial market participants.

The advantages of nuclear power are obvious in the context of environmental warming. It is virtually carbon free, it exists as an industry and as a technology, and it is already generating about 10 percent of European power as of 2020. But its environmental concerns are also significant, with hazardous waste disposal and operational safety as two longstanding issues.

Major European powers are split on the use of nuclear energy in the green transition. Germany, which has a long history of opposition to nuclear power, has been against nuclear’s inclusion. The nation is shuttering its own nuclear power production following the meltdown in Fukushima, Japan a decade ago. France, which has a strong nuclear generation presence, has sought to keep nuclear in EU plans.

It appears that nuclear will be able to make the cut. Germany will likely abstain from voting on nuclear rather than supporting it, allowing the proposal to go ahead despite its own national approach, according to news reports.

Natural gas produces carbon emissions, but about 50 percent less than coal and about 30 percent less than oil. Thus the debate here is more relevant to global warming. Is natural gas a step in the right direction, or only a half step in the wrong direction?

Critics say that supporting investment in hydrocarbons, or failing to penalize them, is a dead-end policy. Usage of this fuel merely prolongs the problem and risks stranded investments, as price and technology increasingly shift the world to renewables. There is ample evidence to support the growth prospects and capabilities of renewables.

Natural gas producers and transporters will point to the immediate and attainable gains in emissions cuts. Natural gas can also be paired with carbon capture. This is a future option (setting aside the question of who will bear the cost) that can keep the fuel as part of transition plans.

And finally, some amounts of clean-burning hydrogen can be blended into natural gas. This may help create an early market for the carbon-free fuel, which looks to be in a development phase over the next decade.

The merits of each side will no doubt be debated and may come down to the specifics of certain natural gas projects. But it appears that natural gas, in billing itself as a practical improvement, a player in electrification, with future options to become greener, has done enough to make the cut.

The proposal is now in the process of further scrutiny and may be adopted as early as this month.

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

bierman@neweconomy.site

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