The EU Commission has presented its final proposal for a taxonomy regulation for a sustainable economy. As in the proposal presented on New Year’s Eve 2021, it remains committed to classifying nuclear power and natural gas as sustainable.
The EU Commission announced that gas and nuclear power would have to contribute to the transition to climate neutrality. Nuclear energy must meet nuclear and environmental safety requirements, and natural gas must contribute to the transition from coal to renewable energy.
At the same time, the EU Commission is introducing disclosure requirements for companies active in the gas and nuclear energy sectors. Investors need to be able to identify investment opportunities that include gas or nuclear activities.
Four months objection period
The text of the delegated act that is now available is the result of consultations with the Member State Expert Group on Sustainable Finance and the Sustainable Finance Platform. The Commission also heard feedback from the European Parliament on the proposal of December 31, 2021. The EU Commission writes that it has carefully examined the contributions received from these groups and taken them into account in the text now presented. This includes adjustments to the technical screening criteria as well as disclosure and verification requirements.
The EU Parliament and member states in the EU Council now have four months to examine the taxonomy. You can apply for an extension of two months. The EU Council can raise objections with 72 percent, i.e. with at least 20 member states. In the EU Parliament, a simple majority is sufficient for objections.
Update 2/3/21, 1:55 p.m
EU Financial Markets Commissioner Mairead McGuinness explained that the taxonomy will help guide the way for private investment to contribute to our climate goals. The EU taxonomy is an instrument to improve transparency in financial markets: it is therefore an instrument for the financial sector, not an EU energy policy instrument. Member States remained fully responsible for deciding their own energy mix.
Harmful energy sources such as coal still account for 15 percent of electricity generation today, and some parts of Europe are still heavily dependent on coal. Taxonomy is about accelerating the transition from high-carbon energy sources to low-carbon sources. Renewable energies are already included in last year’s taxonomy. Edgas and nuclear energy could also contribute to the difficult transition to carbon neutrality – albeit under strict conditions, says McGuinness. The EU Commission is now planning further additions to water, the circular economy, waste avoidance and biological diversity.
Nuclear power was included in the taxonomy, primarily at the instigation of France, while natural gas suits the German side. Critics of the EU Commission’s proposal believe that the Green Deal will be watered down, and money will be taken from renewable energies. In addition, nuclear power is not suitable as a transitional technology, since further expansion would take too long and be too expensive.
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