Greens are fighting EU taxonomy plans on nuclear power

“Nevertheless, we have to remain vigilant because it is natural gas that is harmful to the climate,” said Badum. “I am now expecting an examination by the federal government, but I am not very optimistic that the current proposal can be approved.”

Government spokesman Steffen Hebestreit stressed that the criteria proposed by the Brussels authority for classifying gas-fired power plants as climate-friendly are “in line with the position of the federal government”. The federal government, however, expressly rejects the Commission’s assessments of nuclear power, he said. Hebestreit is one of Chancellor Olaf Scholz’s close confidants.

This makes the taxonomy one of the first big points of contention of the traffic light coalition. The SPD and FDP are far less critical of the EU Commission’s plans than the Greens.

With regard to the assessment of natural gas, the Commission’s proposals meet with approval from the Social Democrats and Liberals. On the atomic issue, the SPD and FDP are ready to give in to pressure from the French. For weeks France has been campaigning for nuclear power to be included in the EU taxonomy.

EU member states have until January 12 to comment on the draft

At the weekend, the EU Commission’s proposal on EU taxonomy became known. According to the Commission’s plans, investments in gas and nuclear power plants are to be classified as climate-friendly under certain conditions.

Specifically, the Brussels proposal provides that investments in new nuclear power plants can be classified as green transition technology if the plants meet the latest technical standards and if a specific plan for the operation of a disposal plant for high-level radioactive waste is presented by 2050 at the latest. Investments in new gas-fired power plants should also be classified as sustainable on a temporary basis. For example, how many greenhouse gases are emitted should be relevant.

The EU member states now have until January 12 to comment on the draft. Its implementation can only be prevented if at least 15 EU states come together, representing at least 65 percent of the total population of the EU, or at least 353 members of the EU Parliament.

This is considered unlikely as there is a majority in the EU in favor of nuclear power. In addition to France, Finland, Poland, Hungary, the Czech Republic and Slovakia, Slovenia and Croatia as well as Romania and Bulgaria have officially committed to nuclear power. Determined opponents are Germany, Austria, Luxembourg, Denmark and Portugal.

Even in the group of countries that have not officially but tended to say pro or contra nuclear energy, the majority are in favor of nuclear power: there are signals from the Netherlands, Belgium and the Baltic countries that they are in favor of nuclear power to rethink new nuclear power plants. On the other hand, only Italy, Spain and Ireland have so far been seen as further opponents of nuclear power.

The Greens are therefore under pressure. You have to defend yourself against the accusation that climate protection issues were lost in the traffic light coalition. In particular, when it comes to rejecting nuclear energy, no compromises are conceivable for the Green Party or for climate and environmental protection organizations.

Organizations such as the anti-nuclear movement “Radiated” accuse the Greens of being ripped off in the coalition negotiations. The organization said on Monday that shortly before the conclusion of the negotiations, a sentence had been deleted from the draft coalition agreement that would have obliged the new government to actively oppose the inclusion of nuclear and gas-fired power plants as sustainable technologies.

The chemical and electricity industries, on the other hand, had expressly welcomed at the weekend that the Commission wanted to include natural gas in the taxonomy. The companies are convinced that natural gas is indispensable on the path to climate neutrality.

Business believes the Commission’s conditions are unrealistic

The economy criticizes, however, that the EU Commission links the inclusion of natural gas in the taxonomy with conditions that are difficult to meet. “The EU Commission wants to create criteria that are very unrealistic. This includes the condition that at least 30 percent CO2-free fuels, such as green hydrogen, must be used in power plants from 2026, “said Holger Lösch, Deputy General Manager of the Federation of German Industries (BDI), the Handelsblatt.

It is “very questionable whether climate-neutral hydrogen will be available in sufficient quantities by then”. In addition, it is unlikely that the necessary pipeline infrastructure for hydrogen transport to the power plant locations will already be in place by then.

“The Federal Government must ensure that the necessary expansion of gas-fired power plants can be funded with national instruments regardless of the EU taxonomy. An earlier coal phase-out would only be possible with a secure power supply and gas as the bridging technology, ”said Lösch.

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The taxonomy is primarily a reference to investors. Representatives of the commission emphasized again on Monday that it was not about banning state investments or making legal restrictions on state loans.

In fact, taxonomy is very likely to affect how tax money is invested. Hundreds of billions of euros will have to be invested in the coming years to reduce CO2 emissions to zero by 2050, as the EU has promised. Which projects the states subsidize and to whom they give loans will probably also differ along the taxonomy.

There are already funding programs from KfW that are based on the criteria of taxonomy – many parts of which are already in force. Municipalities also have to decide whether to expand gas-fired power plants, gas networks and electricity networks. “Every municipality in Europe has to plan from the end. We need new infrastructure for a climate-neutral world, ”says Matthias Buck from Agora Energiewende. Instead of helping planners, the commission is sending confusing signals.

Large investors see no reason to change their strategy

Two more levers could be added. “The big question is: How do we finance the green transformation in Europe?” Says Green MEP Michael Bloss. It would be possible for states to take out loans for this purpose. Italy suggests not counting these loans against new borrowing, which is limited for euro countries by the Maastricht criteria.

The idea of ​​a climate transformation fund also has a realistic chance of implementation. This could function like the Corona reconstruction fund, in which the EU takes on debts and passes the money on to the member states for a specific purpose. “Both could be based on the criteria that are now set in the taxonomy,” says Bloss. “Then billions of dollars in public money are quickly at stake.”

So far, major investors have not seen any specific need to adjust their investment strategy, especially since large fund providers in Germany have been excluding nuclear power providers for a long time. Operators of natural gas power plants, on the other hand, usually belong to the portfolio. “We have been excluding nuclear power producers for our sustainable funds for many years, mainly because the operation of nuclear power plants is associated with disaster risks and no solution has been found for the problem of final storage,” says Hendrik Pontzen, Head of Sustainability at the cooperative fund provider Union Investment.

“The taxonomy for nuclear power and gas will not change anything in our ESG portfolios,” emphasizes Ingo Speich, Head of Sustainability at the Sparkasse fund subsidiary Deka Investment. There are no shares in nuclear power producers in the fund. Gas-fired power plant providers such as Siemens Energy have also been included in sustainability portfolios at Union Investment.

The alliance does not comment specifically on the EU Commission’s proposal, but does not exclude operators of nuclear and gas-fired power plants. For the portfolio of its own investments of 800 billion euros internationally, the group is defining goals for the future.

The alliance wants to “gradually implement the 1.5 degree target” of the Paris climate agreement by 2050. This includes a gradual exclusion of coal miners and electricity producers by 2030. In addition, the group is examining all “sensitive sectors” for sustainability risks on a case-by-case basis. The fund subsidiary Allianz Global Investors is proceeding in a similar way.

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