Brussels People in Brussels know very well that this is a sensitive political project. On New Year’s Eve 2021, two hours before the new year began, the EU Commission sent out its communication on the EU taxonomy to the member states – a point in time probably not chosen by chance. The content: the decision as to whether nuclear power and natural gas can each count as sustainable economic activity.
This has been bitterly disputed in Brussels for years. The biggest arguers: France and Germany. Paris wants to fight climate change with CO2-free nuclear power, Berlin wants to initially use natural gas as a substitute for coal.
As a compromise, the EU Commission now wants to declare both forms of energy generation as sustainable investments – under certain conditions, such as that there are plans for a nuclear waste repository or that gas power plants use so-called “low carbon” gases by 2035 at the latest emit less CO2 compared to conventional natural gas. Austria wants to sue the decision.
The most important questions and answers to the current debate.
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What is the EU taxonomy actually?
This is a classification system for sustainable financial products – a kind of list drawn up in Brussels of all ecologically sustainable economic activities. This is intended to provide a binding answer to the question: When does a company work sustainably?
The goal: Avoid greenwashing, give investors orientation, divert financial flows – and ultimately finance the green restructuring of the economy. The EU wants to be climate neutral by 2050 and reduce its CO2 emissions by at least 55 percent compared to 1990 levels by 2030.
There are three different classification areas in the EU taxonomy. What does that mean in concrete terms?
Technologies can be classified as “green”, “enabling” and “transitional”.
Technologies that serve the following six environmental goals are considered “green”: climate protection, climate change adaptation, marine protection, the transition to a circular economy, avoidance of environmental pollution and the protection of biodiversity.
“Enabling” technologies themselves do not make a significant contribution to climate protection, but they do help other companies directly to reduce their CO2 emissions and work in a more environmentally friendly manner. An example: the construction of pipelines.
Transitional activities include business areas for which there are no technically or economically feasible low-emission alternatives, but which nevertheless contribute to the climate-neutral restructuring of the economy.
Are there any other criteria for the EU taxonomy?
In addition to the above categories and their definitions, the “Do-No-Significant-Harm-Principle” (DNSH) applies. Companies must therefore not cause any significant damage to the climate, the environment or society with their business.
Why should nuclear power and gas be considered sustainable investments?
The EU Commission wants to include nuclear power and natural gas in the transition technology category. The argument in favor of nuclear power is its CO2-free generation of electricity. Gas should fall into this category, since the fuel produces less CO2 than, for example, burning coal.
Paris wants to fight climate change with CO2-free nuclear power, Berlin wants to initially use natural gas as a substitute for coal.
(Photo: Bloomberg)
Who is on which side in the dispute?
France leads the EU’s pro-nuclear camp, Germany is vehemently in favor of gas. The Commission’s approach can be seen as a compromise proposal for both sides and camps.
Who are proponents and opponents of nuclear power?
In the EU there is a clear majority in favor of nuclear power. In addition to France, Finland, the Visegrad countries Poland, Hungary, the Czech Republic and Slovakia, as well as 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.
Can the EU Commission’s plans still be stopped?
The Commission’s communication is a draft delegated act that will be officially published on January 12th. This means that the project can then no longer be changed by the Council and Parliament, but can only be completely rejected.
This requires a qualified majority in the Council: 20 of the 27 member states, which represent 65 percent of EU residents, would have to veto. However, this cannot be achieved because of the large number of countries in favor of nuclear power.
In the EU Parliament, a simple majority is enough for a veto – but that doesn’t exist either. The regulation will then come into force at the end of 2022.
Austria is therefore considering taking legal action. What possibilities are there exactly?
The opponents of nuclear power could go to the European Court of Justice – the Austrian Environment Minister Leonore Gewessler has already announced that she will do so.
Your ministry had already commissioned a legal opinion last year, according to which, from a legal point of view, nuclear power cannot be a sustainable investment. The arguments of the lawyers at Redeker Sellner Dahs refer to the DNSH principle and the three categories of EU taxonomy.
Your ministry had already commissioned a legal opinion last year, according to which, from a legal point of view, nuclear power cannot be a sustainable investment.
(Photo: AP)
Due to the risk of reactor accidents and the problem with nuclear waste, for which there is currently no final storage solution, they consider nuclear power to be incompatible with the DNSH principle.
Because of the environmental problems, nuclear power cannot fall into the “green” category, they argue. It could not be regarded as “enabling” since, according to the definition, only business areas that are not themselves CO2-free count as such. And the argument in favor of nuclear power is that it is CO2-free. The same applies to the category of transition technologies: According to the definition, these are also not CO2-free, but nuclear power is.
If the legal action is unsuccessful, will nuclear power plants be built all over Europe?
The EU taxonomy has nothing to do with a general permit or a general ban on nuclear power within the European Union. Each EU country makes sovereign decisions about its energy mix – that is, whether it uses nuclear energy or not. The EU taxonomy only deals with the question of whether investments in nuclear power can be labeled as sustainable investments.
However, European green bonds and thus the question of how green EU funding is distributed should also be aligned with the rules of the EU taxonomy. Thus, in the end, German tax money will also flow into the expansion of European nuclear power.
More: Comment: The criticism of the EU taxonomy is exaggerated.