EU moves forward on thorny green nuclear proposals

The European Parliament was expected to decide this week whether to accept an EU law labelling investments in gas and nuclear power plants as climate-friendly.

The parliament will decide whether to veto the European Commission’s proposal to add gas and nuclear power plants to the European Union “taxonomy”, a list of economic activities that investors can label and market as green in the EU.

With its taxonomy, the EU aims to clear up the murky world of sustainable investing, by ensuring that any financial products making eco-friendly claims adhere to strict standards.

“There will be no greenwashing,” EU financial services chief Mairead McGuinness said.

But the debate over gas and nuclear rules – which Brussels delayed by a year and redrafted multiple times amid lobbying by governments and industries – has put politicians at loggerheads over which fuels to incentivise, as Europe strives to hit climate goals and wean itself off Russian gas at the same time.

“We cannot let this happen, otherwise we will be tied to fossil energy long after we should have phased it out,” said lawmaker Linea Sogaard-Lidell of the centrist Renew political group and an opponent of the rules.

Conservative lawmaker Pernille Weiss, a supporter, warned that failure to incentivise gas and nuclear investments would “tie down the European Union to coal and oil” and make it harder to cut emissions.

Lawmakers also disagree on how the law will impact financial markets, with some warning that gas and nuclear projects could face higher capital costs if they are denied “green” status.

Others suggest the taxonomy’s political symbolism far outweighs the impact it will have on investors, since the law does not prohibit investments in activities without the green label.

Nuclear-reliant France has strongly supported the proposal, alongside pro-gas states like Poland. Opponents include anti-nuclear Germany, and those such as Denmark that say it is not credible to label CO2-emitting gas as climate-friendly.

Some EU lawmakers, the governments of Austria and Luxembourg and climate campaigners have threatened to take legal action if the EU proposal becomes law.