Parliament will decide whether to veto the European Commission’s proposal to add gas and nuclear power plants to the European Union’s “taxonomy”, a list of economic activities that investors can label and market as green in the EU.
EU officials expect a close vote. A total of 353 lawmakers – just over half of the 705 members of the full Parliament – are expected to reject the EU rules. Voting must be done in person, so the grip of lawmakers on sick leave with COVID-19 has further tightened the ballot.
The parliament will vote noon.
With its taxonomy, the EU aims to clarify the murky world of sustainable investing, ensuring that any financial product making green claims adheres to strict standards.
“There will be no co-laundering,” Mairead McGuinness, the EU’s financial services chief, said on Tuesday.
But the debate over gas and nuclear rules – which Brussels delayed for a year and reshuffled several times due to lobbying from governments and industries – has left politicians at odds over what fuels to encourage, so that Europe is striving to meet climate targets and wean itself off Russian gas at the same time.
“We cannot let this happen or we will be tied to fossil fuels long after we should have phased it out,” said lawmaker Linea Sogaard-Lidell of the centrist political group Renew and opponent of the rules.
Nuclear energy is free of CO2 emissions, but produces radioactive waste. Gas is a fossil fuel that produces planet-warming emissions, but is seen by some EU countries as a way out of the dirtier coal.
Conservative MP Pernille Weiss, who backs the proposal, warned that unless gas and nuclear investment were encouraged, the EU would be “coal and oil tied” and would have a harder time reducing emissions that warm the planet.
Lawmakers are also at odds over the law’s impact on financial markets, with some warning that gas and nuclear projects could face higher investment costs if denied “green” status.
Others suggest that the political symbolism of the taxonomy far outweighs the impact it will have on investors, since the law does not prohibit investment in activities without the green label.
Nuclear-dependent France has strongly backed the proposal, along with pro-gas states like Poland. Opponents include anti-nuclear country Germany and countries like Denmark, which believe it is not credible to label the CO2-emitting gas as climate-friendly.
Some EU lawmakers, the governments of Austria and Luxembourg and climate advocates have threatened legal action if the EU proposal becomes law.