BRUSSELS: The European Union has drawn up plans to label some natural gas and nuclear energy projects as “green” investments after a year-long battle between governments over which investments are truly climate-friendly.
The European Commission is expected to propose rules in January deciding whether gas and nuclear projects will be included in the EU “sustainable finance taxonomy”.
This is a list of economic activities and the environmental criteria they must meet to be labelled as green investments.
By restricting the “green” label to truly climate-friendly projects, the system aims to make those investments more attractive to private capital, and stop “greenwashing”, where companies or investors overstate their eco-friendly credentials. Brussels has also made moves to apply the system to some EU funding, meaning the rules could decide which projects are eligible for certain public finance.
A draft of the Commission’s proposal would label nuclear power plant investments as green if the project has a plan, funds and a site to safely dispose of radioactive waste. To be deemed green, new nuclear plants must receive construction permits before 2045.
Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt hour (kWh), replace a more polluting fossil fuel plant, and receive a construction permit by Dec 31 2030.
Gas and nuclear power generation would be labelled green on the grounds that they are “transitional” activities — defined as those that are not fully sustainable, but which have emissions below industry average and do not lock in polluting assets.
“Taking account of scientific advice and current technological progress as well as varying transition challenges across member states, the Commission considers there is a role for natural gas and nuclear as a means to facilitate the transition towards a predominantly renewable-based future,” the European Commission said in a statement, adding that consultations on a draft began on Friday.
To help states with varying energy backgrounds to transition, “under certain conditions, solutions can make sense that do not look exactly ‘green’ at first glance,” a Commission source said. However, natural gas and nuclear will be subject to strict conditions, the official added.
EU countries and a panel of experts will scrutinise the draft proposal, which could change before it is due to be published later in January. Once published, it could be vetoed by a majority of EU countries or the European Parliament.
Published in Dawn, January 2nd, 2022
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