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EU Officially Gives Green Label To Natural Gas And Nuclear

gas fired plant

The European Union unveiled how it plans to label investments in some gas and nuclear projects as sustainable, a move that has divided member states as the energy transition collides with political reality.

The European Commission is announcing its proposal Wednesday in Brussels, which will then be scrutinized by national governments.

The move has triggered concerns among investors over the risk of greenwashing, and politicians in some countries criticized the draft, saying it could damage the credibility of the EU’s new rules and divert money away from renewables.

The draft underscored deep divisions among member states. The Netherlands and Denmark oppose including natural gas because they don’t rely on such plants, while Germany — which is phasing out nuclear — criticized the green label for atomic power.

But those opposing it may find it hard to block, as EU law requires at least 20 member states to reject the plan for that to happen.

The label system is being closely watched by investors to know what projects will count as green, and could potentially attract billions of euros in private finance to aid the shift to a low-carbon economy.

The challenge is ensuring that the decision on nuclear and gas gets enough political support, at a time when some lobbies say those forms of energy shouldn’t be included at all.

“At the absolute minimum, the Commission should tighten the draft criteria to reflect the full impact of gas and nuclear energy on climate and environment and strengthen the governance rules to prevent greenwashing,” said Johannes Schroeter, a policy adviser at the E3G environmental think tank.

“It would be unacceptable if nothing changes or the criteria are loosened further.”

SOME OF THE COMMISSION’S PROPOSALS:

Gas projects replacing coal and emitting no more than 270 grams of CO2 equivalent per kilowatt-hour can get a temporary green label, or if annual emissions of the activity don’t exceed an average of 550 kilograms per kilowatt-hour over 20 years.

Such plants would have to obtain construction permits by 2030 and have plans to switch to renewable or low-carbon gases by the end of 2035.

Nuclear is eligible if new plants that are granted construction permits by 2045 meet the criteria to avoid significant harm to the environment and water resources.

Funds need to enhance disclosures to investors on nuclear and gas holdings under the taxonomy.

The EU in April announced the first set of criteria for green investments that will allow producers of rechargeable batteries, energy efficiency equipment, low-emission cars, wind and solar plants to earn a formal green label.

It delayed the decision on nuclear and gas projects amid concerns about their inclusion. …snip…

It’ll be hard for the European Parliament and member states in the EU Council to reject the Commission’s taxonomy proposal. Neither has the right to propose amendments — they can only block it if they get enough votes.

Read rest at Bloomberg

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