Investments in some gas and nuclear power plants would be labelled as sustainable under rules proposed by European Commission on Wednesday, a plan that has split countries and investors, and which some lawmakers will attempt to block.
Brussels has taken more than a year to decide if gas and nuclear energy should count as green investments in the EU’s taxonomy, an investor rulebook designed to help raise massive amounts of private capital to meet EU climate change targets.
In final rules published on Wednesday, gas power plants would be labelled green this decade if they emit less than 270g of CO2 equivalent per kWh, or have annual emissions below 550kg CO2e per kW over 20 years.
That could include gas plants with relatively high CO2 emissions today, provided they switch to low-carbon gas or reduce their running hours in later years.
Gas plants must switch to run on low-carbon gases by 2035. A requirement in a previous draft, for plants to start switching in 2026, was dropped.
New nuclear plants must receive construction permits before 2045 to get a green investment label, and be located in a country with a plan and funds to safely dispose of radioactive waste by 2050.
“We’re setting out how gas and nuclear could make a contribution in the difficult transition to climate neutrality,” EU financial services chief Mairead McGuinness said.
“We’re putting in place strict conditions for their inclusion in the taxonomy.”
The rules, which arrive as Europe grapples with surging energy prices and concerns about its reliance on imported Russian gas amid political tensions over Ukraine, have faced opposition on multiple fronts, including from campaigners, the EU’s expert advisers, some investors and countries. That debate reflects broader divisions among governments over the path to meet the EU’s goal of net zero emissions by 2050.
EU countries and the European Parliament have four months to potentially block the rules, which could be done by a super-majority of 20 out of the 27 EU countries - a threshold seen as unlikely - or a majority of lawmakers.
Green EU lawmakers said on Wednesday they would campaign for the 353 votes needed to block the proposal, and already had roughly 250.
“There is still a chance to stop this,” German Green lawmaker Michael Bloss said.
The Austrian government on Wednesday repeated its threat to take legal action over nuclear’s green label. While opponents cite concerns over nuclear waste disposal, pro-nuclear states including France say the CO2-free energy source is crucial to meet climate targets.
Gas is similarly divisive, with Poland and Bulgaria among the states that say gas investments should be encouraged to phase out more-polluting coal. Denmark, Ireland and others say labelling the fossil fuel as green would undermine the EU’s leadership in fighting climate change.
If approved, the gas and nuclear rules would apply from January 2023, when providers of financial products must disclose what share of their investments comply. The taxonomy does not oblige investors to make “sustainable” investments - rather, it limits which ones can be marketed as such.