Brussels wants to recognize nuclear power and forms of natural gas as “green” activity as part of a landmark EU classification scheme to help financial markets decide what counts as a sustainable investment.
In long-awaited plans, the European Commission has paved the way for investment in new nuclear power plants for at least the next two decades and natural gas for at least a decade, under a green labeling system known as the “taxonomy for sustainable finance”.
The labeling system, which will cover industries that generate about 80 percent of all greenhouse gas emissions in the EU, is the first attempt by a major global regulator to decide what counts as truly sustainable economic activity and help stamp out so-called greenwashing in the financial sector.
A draft legal text, seen by the Financial Times, says the EU’s green label should be awarded to controversial energy sources including nuclear power and natural gas under certain circumstances.
The decision was taken after a vocal group of pro-nuclear countries, led by France, and pro-gas governments in southern and eastern Europe, demanded the taxonomy should not punish energy sources that provide a bulk of their power generation.
Nuclear power does not emit greenhouse gases but produces toxic waste that requires safe disposal and can pose radiation risks. Natural gas does produce carbon dioxide but its supporters say it is far less polluting than traditional fossil fuels and is a vital way to help pave the way for lower emissions.
Brussels was forced to delay a decision on how to classify the two energy sources earlier this year after disputes inside the college of commissioners over whether they should be awarded the green label. The battle to recognize nuclear power and natural gas as green has intensified in recent months as EU countries have faced record electricity prices this winter, driven by soaring demand for natural gas imports.