EU vote on place of nuclear, gas in green taxonomy to end months of wrangling

The European Parliament on July 6 will hold a final vote on including nuclear power and natural gas in its sustainable finance taxonomy, and whether the plan will receive the green light is uncertain.

The European Commission laid out its proposals on the taxonomy in February. Its labeling of nuclear and gas as transitional technologies in the rulebook under certain conditions was controversial.

Since then, parliamentarians and activists have voiced criticism over the inclusion of those technologies. Peter Liese, a center-right German member of the European Parliament, said July 4 that the proposals "[send] completely the wrong signals for the future."

If the Taxonomy Complementary Climate Delegated Act is ratified in Parliament, gas will be included until 2030, with emissions thresholds also in place. It will be considered sustainable if it replaces coal generation, and operators must demonstrate that they can switch to low-carbon fuels from 2035.

While criteria on issues such as waste disposal for nuclear power are strict, the transitionary period for the technology is also extended.

"Nuclear power plants of conventional design, for which there is planning permission until 2045, would be labeled as sustainable under certain conditions. In all likelihood, these nuclear power plants will not supply electricity before 2070," Liese said in a statement. "It is also unacceptable that [compliance with new standards for] disposal of waste does not have to be guaranteed until 2050."

Objections from 20 member states, representing at least 65% of the EU's population, are required to block the passage of the bill. The European Parliament can object if a majority of its members vote against it in the plenary.

"[Members of the European Parliament] ... need to object to the classification of fossil gas and nuclear activities as environmentally sustainable — an evident example of greenwashing," Marta Toporek, a lawyer at environmental group ClientEarth, said in a July 5 statement.

Industry sees green light as essential

Industry organization Eurelectric, which long refrained from taking a stance on the taxonomy, now urges parliamentarians to back the inclusion of nuclear and gas in the vote.

Nuclear projects, in particular, would benefit strongly from inclusion in the taxonomy. Even a small reduction in the cost of borrowing thanks to the green label makes a difference when projects run into the tens of billions of euros. Since the start of the war in Ukraine, support for nuclear as a reliable baseload power source has also grown in some parts of Europe.

"The [delegated act] is a key lever to achieve the EU's climate objectives in a cost-effective way taking into account the decarbonization strategy and security of supply of all member states. The recognition of the importance of the European nuclear fleet for climate and the recognition of gas as a transitional fuel under strict technical screening criteria will reduce our dependency on Russian fossil fuels and contribute to the REPowerEU plan," Eurelectric President Jean-Bernard Lévy said, referring to the EU's plan to pivot from Russian energy imports.

"For these reasons, it is essential that [it] be supported by the European Parliament," Lévy, who is chairman and CEO of French nuclear giant Electricité de France SA, said in an emailed statement.

While parliamentary support for the bill was long seen as fairly secure, it is now expected to be a close vote.

Gas, especially, has seen its role as a transition fuel questioned in the aftermath of Russia's invasion of Ukraine. The EU plans to stop consuming Russian gas by 2027, and gas prices continue to spiral in anticipation of further supply cuts.

In June at a joint meeting of the EU's Economic and Monetary Affairs Committee and its Environment, Public Health and Food Safety Committee, 76 members of the European Parliament voted to adopt an objection to the commission's plan to include the technologies in the rulebook.

The members recognized the role of nuclear and gas in a stable energy system but said technical screening standards proposed in the legislation were inconsistent with criteria for environmentally sustainable activities as defined in the taxonomy.

ClientEarth also argued that the delegated act is incompatible with the EU's own legislation. "Branding fossil gas as transitional and green in the taxonomy is not only a climate catastrophe, it's also unlawful," Toporek said. "It clashes with the EU's key climate legislation and the main piece of EU legislation on the taxonomy itself."

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