The European Commission has been accused of undermining its climate goals after it defied critics by pushing ahead with plans to include gas and nuclear in an EU guidebook for “green” investments.
Gas and nuclear were deemed bridge technologies to meet the EU’s target of net zero emissions by 2050, in long-awaited proposals on the EU’s “taxonomy for environmentally sustainable economic activities”, which were published on Wednesday.
“The reason we are including gas and nuclear in the way we are doing it is because we firmly believe that this recognises the need for these energy sources in transition,” the EU commissioner for financial services, Mairead McGuinness, told reporters.
Critics said including gas and nuclear in a guide intended to prevent greenwashing jeopardised the EU’s climate goals and hopes of keeping global heating below 1.5C.
“The European Commission is significantly undermining the EU’s credibility as a climate actor,” Bas Eickhout, a Dutch Green MEP and vice-chair of the European parliament’s environment committee, said. “At the UN climate summit in Glasgow, small steps were taken towards phasing out fossil fuels. Yet, unfortunately, the commission is already turning back the clock and leaving the door open to the gas industry.”
Laurence Tubiana, the chief executive of the European Climate Foundation and an architect of the landmark 2015 Paris climate agreement, said: “The EU taxonomy was envisioned as a vital tool to align financial flows with the Paris agreement. Instead, Europe is undermining its climate leadership and lowering standards in the EU and beyond. When a gold standard does emerge elsewhere, this taxonomy will be left behind.”
Since the proposals leaked on New Year’s Eve 2021 – fuelling bitter accusations of a lack of transparency – the commission has made minor tweaks that make it easier for gas projects to get in the green guidebook.
Gas plants can get the stamp of approval if they switch to low-carbon gases or renewables by 2035. A previous requirement to phase-in low-carbon fuels by 2026 has been dropped.
The taxonomy – intended to channel billions of private money into climate-friendly investments – is fast becoming one of the biggest controversies of Ursula von der Leyen’s tenure as European Commission president. Last month Greta Thunberg and climate activists slammed the plans as “fake climate action” that flout scientific advice.
In a further sign of anger, campaign group Avaaz staged a mock burial of the taxonomy on a roundabout outside the commission headquarters, with activists wearing face masks of Von der Leyen, Germany’s Olaf Scholz and France’s Emmanuel Macron. France pressured Von der Leyen to grant the stamp of approval for nuclear power, while Germany had lobbied for the inclusion of gas, although Scholz’s coalition government is split on the issue.
“Europe is witnessing our biggest setback yet in our moonshot mission,” said Patricia Martín Díaz of Avaaz. “Labelling fossil gas and nuclear as green is incompatible with the EU’s 2050 climate targets and our hope of keeping 1.5C alive.”
The Institutional Investors Group on Climate Change, which represents 375 funds holding €51tn assets under management, also urged the commission to drop gas, citing International Energy Agency studies that show Europe’s existing gas plants will have to close by 2035. “Put simply, there is no remaining carbon budget for new investments in natural gas,” the group said.
Other critics include an expert panel convened by the commission, which said the plans were “not in line” with the original regulation, agreed in July 2020. In its stinging rebuke, the EU platform on sustainable finance – a group that includes industry, NGO and finance experts from EU institutions – said they had doubts about the criteria for gas and nuclear, while “many are deeply concerned about the environmental impacts that may result”.
The group said only gas plants emitting less than 100 grams of CO2 equivalent per kilowatt hour over their lifecycle should be allowed, a criteria that excludes conventional gas. In contrast, the commission would allow gas plants emitting 270g CO2e/kWh to be classed as “sustainable” until 2030. A second alternative would allow gas plants that emit an average of 550g CO2 e/kWh over a twenty-year lifespan. Critics describe this as loophole that allows new gas plants to be built on a promise of carbon capture technology that is yet to take off.
The EU taxonomy became law in July 2020, but legislators left important details to be resolved through so-called delegated acts – secondary legislation meant for technical issues that is not subject to the same degree of ministerial and parliamentary oversight.
Critics have accused the commission of abusing the process, by smuggling in the controversial issues of nuclear and gas into the latest delegated act, rather than drafting a separate law.
Only a supermajority of 20 out of 27 EU member states, or a majority of the European parliament’s 705 MEPs can now defeat the plans during a scrutiny period of four to six months that began on Wednesday.
Commission officials played down the threat of a legal challenge from Austria and Luxembourg, describing it as “a very theoretical discussion”. Both countries oppose nuclear power, while Green ministers in the German coalition government have dismissed the plans as greenwashing.
Denmark, Sweden and the Netherlands had urged the commission not to label gas as green, while Germany declared its opposition to nuclear.
Yet France, backed by central and eastern European member states, lobbied Von der Leyen to include gas and nuclear, which they consider as a bridge to the EU’s net zero future.
The largest group in the European parliament, the European People’s party has come out in favour of gas, underscoring the difficulties of defeating the plans. “Flexibility is needed in the way we decarbonise. If, for example, Poland would like to replace a coal plant with several small gas plants, this should be possible if it helps achieve climate neutrality”, Esther de Lange, a Dutch Christian Democrat, said.
Lisa Fischer, who leads the E3G thinktank’s work on climate neutral energy systems, said gas and nuclear had no place in the taxonomy. “Gas investments are not only harmful to the climate they are also increasingly financially risky. Nuclear makes the EU’s energy transition more costly than it needs to be.”
In a sign of the intense arguments, McGuinness revealed that had been no unanimity among the commission’s top 27 officials; she said an “overwhelming majority” of EU commissioners had backed the plans.
“We were legally obliged to do this,” she said referring back to the initial July 2020 law. Opponents in national capitals, however, say the commission had no obligation to include gas or nuclear.
