Regulators

EU Members in Heat Over Including Gas, Nuclear Energy under 'Green' Investment

Published on: 04 February 2022
by KnowESG
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A Brief Summary

Austria and Luxembourg, both European Union member states, have expressed their intention to sue the European Commission over its plan to classify some nuclear and gas energy projects as sustainable activities under the new EU Taxonomy.

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The new classification drafted by the EU Technical Expert Group on Sustainable Finance is a classification system that categorises economic activities which play a significant role in contributing to the EU's environmental objectives. The regulation came into effect at the beginning of this year, while the decision to include gas and nuclear energy under the label of green investment remains stagnant.

The commission stated that it had considered all feedback against the proposals and emphasised adding safety, environmental and disclosure rules to the proposals.

It is often considered that Gas and Nuclear energy will facilitate the shift from fossil-based power to a greener energy system but, according to the EU Platform on Sustainable Finance, classifying them under the category of green investment will not fit the strict criteria of the Taxonomy's framework for transitional activities.

Following the publication of the Delegated Act, the proposals will be forwarded to the European Parliament and Council, where they will be formally established unless 72 per cent of member states representing at least 65 per cent of the EU population, or a majority of European Parliament members, object within four months. The criteria to block the Act's passage, according to most analysts, will not be fulfilled.

Members of the Austrian and Luxembourg administrations have reiterated their opposition to the proposed restrictions, threatening to take legal action if they are implemented.

Germany has also said that it opposes the guidelines, stating that "the Federal Government categorically rejects the inclusion of nuclear energy in the EU Taxonomy." Steffi Lemke, Germany's Federal Environment Minister, added.

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