LEAKED: Paper on gas and nuclear’s inclusion in EU green finance rules - article for EURACTIV
Frédéric Simon | EURACTIV.com - 3 Nov 2021
A proposal to bring both nuclear power and natural gas into the bloc’s green finance taxonomy is circulating in Brussels. The paper has been branded as a “scientific disgrace” by campaigners who warned it would damage the EU’s credibility on green finance.
The so-called “non-paper”, obtained by EURACTIV, lays out detailed technical criteria for gas to qualify as a transitional activity under the EU’s sustainable finance rules.
To qualify as a “sustainable” investment, gas power plants or cogeneration facilities must not emit more than 100 grams of CO2 equivalent per kilowatt-hour, according to the draft paper.
It comes in the wake of declarations by European Commission President Ursula von der Leyen, who said the EU executive would soon table proposals on gas and nuclear as part of the bloc’s green finance rulebook.
“We need more renewables. They are cheaper, carbon-free and homegrown,” von der Leyen wrote on Twitter after an EU summit meeting two weeks ago where leaders debated the bloc’s response to rising energy prices.
“We also need a stable source, nuclear, and during the transition, gas. This is why we will come forward with our taxonomy proposal,” she added.
Gas as a ‘transitional activity’
The 100gCO2 emissions criteria is the same as earlier proposals circulated last year, which were rejected as too stringent by a group of 10 pro-gas EU countries who threatened to veto the proposal.
To assuage critics concerns, the paper lays out additional criteria for gas plants to qualify as a “transitional activity”, accompanied by a sunset clause (until 31 December 2030) for the commissioning of new plants.
For gas power plants, these are the criteria to qualify as a “transitional activity”:
Direct emissions are lower than 340gCO2/kWh, and
Yearly emissions are lower than 700 kgCO2/kW.
For cogeneration plants, these are the criteria to qualify as a “transitional activity”:
Life-cycle emissions are lower than [250-270] gCO2e per kWh, and
Primary energy savings of 10% compared with the separate production of heat and electricity.
Campaigners denounced those criteria as “radically weaker” than previous plans drafted by the European Commission.
“This proposal is a scientific disgrace that would deal a fatal blow to the taxonomy,” said Henry Eviston, spokesman on sustainable finance at WWF European Policy Office.
“It would severely damage the EU’s sustainable finance agenda and the EU Green Deal. It must be firmly rejected by the Commission and opposed by all member states,” he added in a statement.
Campaigners were unsure about the origin of the non-paper. But diplomats who spoke to EURACTIV at an EU summit two weeks ago said France has been working behind the scenes to forge a compromise on the taxonomy that would satisfy supporters of gas and nuclear power.
At the initiative of Paris, representatives from like-minded EU countries held a meeting on 18 October to debate nuclear and natural gas in the context of the taxonomy, the EU diplomat said. The meeting was attended by Bulgaria, Cyprus, Czechia, Finland, France, Greece, Hungary, Malta, Poland, Romania, Slovakia, and Slovenia.
According to the same diplomatic source, participants discussed compromise proposals for technical criteria to assess the sustainability of gas and nuclear power plants.
The European Union is moving a step closer to integrating nuclear power and natural gas in the bloc’s sustainable finance taxonomy after a summit last week where EU leaders discussed the bloc’s response to rising energy prices.
On nuclear, the “non-paper” builds on the EU’s Joint Research Centre (JRC) recommendations, which concluded in a July report that nuclear power was safe and therefore eligible for a green label under the taxonomy.
The paper does not propose detailed sustainability criteria at this stage and merely divides nuclear power production activities into four categories:
Nuclear plant operation: Production of electricity, including the construction, commissioning, operation and decommissioning of nuclear power plants.
Storage or disposal of radioactive waste or spent nuclear fuel (enabling activity).
Mining and processing of uranium (enabling activity).
Reprocessing of spent nuclear fuel (enabling activity).
The “non-paper” comes in the wake of a meeting of EU energy ministers last week where twelve EU countries spoke in favour of nuclear’s inclusion in the taxonomy.
Prominent critics of gas and nuclear’s inclusion in the taxonomy include Elise Attal is Head of EU Policy at the Principles for Responsible Investment (PRI), a United Nations-supported international network of investors.
“Proponents of the inclusion of gas-fired electricity and nuclear energy in the EU Sustainable Taxonomy will argue that these economic activities have a role to play in the energy transition,” she wrote in a recent op-ed published on EURACTIV.
“This argument is beside the point: the EU Sustainable Taxonomy’s design is aimed at defining which economic activities are green – not which economic sectors are needed for the transition to a net-zero by 2050 economy.”
For the leaked paper in pdf, please click here: