EU gas and nuclear rules branded ‘biggest greenwash ever’
Experts and activists have warned the European Commission that including natural gas and nuclear power in its sustainable finance plan would lead to further green laundering, split financial markets and undermine the bloc’s climate goals.
The draft proposal, published late on December 31, would see certain gas and nuclear investments included in the so-called EU taxonomy, under the category of “transitional economic activities”.
But Sébastien Godinot, senior economist at WWF Europe and member of the commission Sustainable Finance Platform, warned on Thursday January 13 that the text contains “major inconsistencies” with the scientific requirements set out in EU rules on sustainable finance.
Gas-fired power plants whose construction permits were granted before 2030 would comply with the taxonomy if they emitted 550 kg of carbon dioxide per kilowatt of plant capacity over 20 years and replaced more polluting plants, among other things. technical criteria.
However, according to calculations by Andreas Hoepner, a professor at University College Dublin, this could create more than 1.4 billion tonnes of CO2 – a figure higher than the annual emissions of France, Poland, Czechia, Romania, Greece, Hungary, Bulgaria, Finland and Sweden.
He argued that “declaring gas green is like declaring french fries salad”.
“For me it’s the biggest greenwash of the year, probably the biggest greenwash ever,” he told EUobserver.
“It’s not based on science. [And] if it is based on science, there is a very, very liberal interpretation of what science is,” he added, arguing that the opinions of experts were not taken into account ex ante before to write this proposal.
Hoepner’s calculation shows that the taxonomy, as it stands, would not align with the “fit for 55” goal of reducing CO2 emissions by 55% by 2030. Instead, he provides simply a “suitable for 38.5”.
Earlier this week, the Institutional Investors Group on Climate Change, whose members represent $50 trillion [€44 trillion] of assets under management, said the inclusion of gas in the EU taxonomy would “seriously undermine Europe‘s status as a global leader in sustainable finance”.
The French win
Meanwhile, the inclusion of nuclear energy in the EU taxonomy is seen as a victory for French President Emmanuel Macron in his bid for re-election in the upcoming presidential elections.
France has lobbied for the inclusion of nuclear energy in the taxonomy along with gas by forming a coalition with governments in Southern and Eastern Europe championing the role of gas in decarbonizing the economy of the EU.
However, Austria and Germany have firmly rejected the inclusion of nuclear power in the proposal – with Vienna threatening to sue the commission if it goes ahead.
“This is an entirely political deal,” Godinot said, saying France was giving up its climate leadership and making it harder for the EU to meet its 2030 and 2050 climate targets.
All of the technologies covered by the taxonomy are subject to the “do no significant harm” principle plus the precautionary principle, but experts questioned whether nuclear energy falls under this basis.
While nuclear energy does not produce greenhouse gas emissions, radioactive waste management is costly and problematic.
“Nuclear is a profit for managers and shareholders [but] a risk to the population,” Hoepner said.
“Headaches for investors”
Moreover, experts warned that including gas and nuclear in the taxonomy would confuse investors and divide financial markets.
“This taxonomy, if not significantly modified, would divide the financial markets between some bona fide investors or banks committing to net zero and other bad faith investors who are willing to take this opportunity to continue with ‘business-as-usual’,” Godinot said.
He also argued that this system would create “a headache for sustainable investors” as they will have to signal that gas or nuclear investments are deemed “green” – without finding this credible themselves.
The taxonomy project has drawn dissatisfaction not only from experts and sustainable investors, but also from environmental groups, such as the youth-led organization FridaysForFuture, which demonstrated outside the Berlaymont in Brussels on Thursday to show its dissatisfaction with the proposal. .
“There’s nothing transitory about locking ourselves into energy sources like gas and nuclear for the next few decades,” young activist Chloe Mikolajczak told EUobserver.
“What we are seeing now is another show of greenwashing and broken promises from the commission at a time when we need to focus all of our efforts on increasing renewable capacity in the spirit of climate justice and transition. just,” she added.