By including and classifying the gas and nuclear sectors as economic activities with a favorable impact on the environment in the European taxonomy, Europe has angered its opponents. It has to be said that this decision has far-reaching consequences for banks, which now have a green light to finance energies that are controversial in the eyes of the general public.
Labeling gas and nuclear power as green investments
After several weeks of debate, in early February the European Commission unveiled its delegated act governing the fate of the two energies in the continental list of green investments. Gas and nuclear power will indeed be included in the European taxonomy, albeit under certain conditions:
- For the construction of new nuclear power plants, planning permission must be obtained before 2045.
- For gas-fired power plants receiving planning permission before 2030, a threshold of 270 grams of CO2 per kilowatt-hour has been set.
This decision is not without consequences for banks, which have recently been encouraged by the authorities to move away from fossil fuels. Most of France's major banking groups have joined the "Net Zero Alliance", an international group of investors committed to transitioning their investment portfolios to carbon neutrality by 2050. The banks have also decided to stop financing coal and to make commitments to exit unconventional fossil fuels, including shale oil and gas.
The measure announced by the European Commission is likely to put the brakes on the banks' momentum. They now have a powerful argument to put up against environmentalists who would like to see funding for gas and nuclear power reduced.
Ecologists and NGOs denounce "greenwashing
For their part, NGOs and environmentalists cry "greenwashing", believing that the taxonomy will " lose its credibility ".
Among them, Greenpeace asserts in a press release dated February 2, 2022 "Taxonomy: the inclusion of nuclear and gas is a hold-up on the European energy transition" that " this decision risks dangerously slowing down the European energy transition by diverting hundreds of billions of euros of private and public funding to climate-damaging and polluting energies ".
Reclaim Finance, founded in 2020 with the aim of putting finance at the service of the climate, considers that the taxonomy is becoming " a greenwashing standard " and calls on financial players to implement a gas and nuclear exclusion standard that is stricter than the taxonomy.
NEW: The #EUTaxonomy compromised by gas and nuclear 🏭☢️
- Reclaim Finance (@ReclaimFinance) February 2, 2022
Following intense industry lobbying supported by a pro-gas and nuclear alliance of countries, the @EU_Commission has included fossil gas and nuclear power in the 🇪🇺 'sustainable' taxonomy. pic.twitter.com/KZN6wbQyRy
For the European Commission, there is no question of demonizing gas or nuclear power, or of diverting private funds away from the taxonomy. The institution points out that the development of renewable energies remains the priority, but that these alone will not be able to meet the growing demand for electricity. This explains why gas and nuclear power are classified in the taxonomy in a transitional energy sub-category with safeguards.