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Following a year-long debate among governments over which investments are truly climate-friendly, the European Union has devised plans to label some natural gas and nuclear energy projects as “green” investments.
In January, the European Commission is expected to propose rules determining whether or not gas and nuclear projects will be included in the EU’s “sustainable finance taxonomy. “This is a list of economic activities and the environmental criteria that must be met in order for them to be labeled as green investments. By limiting the “green” label to truly climate-friendly projects, the system aims to make those investments more appealing to private capital while also preventing “greenwashing,” which occurs when companies or investors exaggerate their eco-friendliness. A draft of the Commission’s proposal obtained by Reuters would classify nuclear power plant investments as green if they have a plan, funds, and a safe disposal site for radioactive waste. To be considered green, new nuclear plants must be built before 2045.Natural gas power plant investments would also be considered green if they emit less than 270g of CO2 equivalent per kilowatt hour (kWh), replace a more polluting fossil fuel plant, and receive a construction permit by December 31, 2030. Other requirements, such as being technically equipped, must be met by such plants. Gas and nuclear power generation would be labelled green on the grounds that they are “transitional” activities – defined as those that are not fully sustainable, but which have emissions below industry average and do not lock in polluting assets during the shift to clean energy.