Investors

EU's Green Gas and Nuclear Investment Guidelines Move to Last Vote

Published on: 5 July 2022 07:00 AM
by KnowESG
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The EU's plan to classify investments in gas and nuclear power facilities as climate-friendly will be put to a final vote on Wednesday. European lawmakers will decide whether to adopt or reject proposals that have divided governments and investors.

The vote is the final obstacle in the European Union's long-delayed decision on whether to add the two energy sources to its "taxonomy," a law that determines whose investments may be marketed as sustainable in Europe.

The laws aim to establish a European standard for sustainable investment and eliminate greenwashing among the myriad so-called eco-friendly products on the market.

However, the argument over investments that can be labelled as "green" has evolved into a broader political dispute over which fuels Europe should invest in to combat climate change and replace Russian gas.

However, the argument over investments that can be labelled as "green" has evolved into a broader political dispute over which fuels Europe should invest in to combat climate change and replace Russian gas.

On Tuesday, EU parliamentarians will discuss the gas and nuclear regulations, followed by a vote on Wednesday, which officials anticipate will be close. A majority of the 705 members of the European Parliament must vote against the proposal to defeat it.

Bas Eickhout, a member of the Green Party, stated that the EU proposal would create false incentives to invest in nuclear energy and gas, a fossil fuel, at the expense of renewable energy, which is required to rapidly reduce greenhouse gas emissions.

Christian Ehler, a politician for the European People's Party, stated that the impact of the taxonomy on future investment is not yet evident, but that its strict limits on CO2 emissions and other criteria will ensure that investments in gas plants comply with climate goals.

Rejection would be a setback for the European Commission, which has spent over a year revising the rules in response to intensive lobbying from governments and the gas and nuclear industries.

To achieve a green designation, gas and nuclear power facilities must meet stringent requirements, according to Brussels.

Critics, including the Commission's advisors, have asserted that gas plants would need to adhere to significantly stricter emission restrictions than those proposed by the Commission to comply with the drastic reductions required to prevent catastrophic climate change.

In an early plan for 2020, the Commission had included a lower emissions limit, but after opposition from some of the bloc's 27 member states, it was revised.

On Monday, EU climate policy leader Frans Timmermans stated that he would have chosen a different taxonomy if left to his choice alone but that the guidelines reflected the political realities of the bloc.

Source: Reuters

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