A projection by the environmental protection organization Greenpeace shines at the end of December on the Grohnde nuclear power plant.
(Photo: dpa)
The EU Commission’s decision to define nuclear power and natural gas as sustainable shows once again: if the interests of large EU states are too different, absurd results will come about. The European Union (EU) wants to create transparency for investors with its taxonomy. Instead, there is one thing above all: confusion. It is important to find a better solution quickly – provided the EU Council or Parliament does not overturn the whole thing anyway.
You can think what you want about nuclear power. As is well known, this type of energy generation is viewed positively in France and many other EU countries. It does not generate any CO2 during operation. But the nuclear fission in the concrete egg is by no means sustainable: it uses up finite reserves of raw materials and generates extremely dangerous waste. And although natural gas is more climate-friendly than coal, it is also not sustainable as a fossil fuel.
The EU wanted to give the financial industry a tool to better channel money into more environmentally friendly channels in the future. Banks and asset managers are now faced with huge requirements when the new rules come into force.
In the future, banks will have to decide which customers they can lend on what terms if company A is sustainable but B is not. Asset managers are concerned because their financial regulator is working to flesh out more EU rules by which to classify their products as more or less sustainable. In addition, an EU regulation will come into force this year, according to which financial advisors must actively discuss the issue of sustainability with their clients.
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Investors – whether private or institutional – have trouble finding their way through the mass of green offers anyway. There are various criteria for what can be considered sustainable.
It is even more confusing when the EU defines controversial energy production as sustainable, even if this is only intended to apply temporarily. Large investors usually define their own green – and have already announced that they will not really be influenced by the EU taxonomy. Still, such a skewed classification can lead investors to misdirect their money and bankers their credit.
It would therefore be logical to at least identify the EU compromise separately – for example as green plus nuclear power. Many fund providers still have natural gas in green portfolios because they see other energy producers as even dirtier. However, this energy could also be shown separately in the taxonomy. That would be transparency instead of confusion.
More: Why the planned new sustainability rules for the financial sector did more harm than good