The controversial decision to classify fossil gas and nuclear energy as ‘green’ in the EU Taxonomy met a shameful turn on February 2nd, 2022 when the European Commission announced adopting nuclear and gas activities as ‘green,’ despite experts warning against the threatening impact of this decision on the credibility of the EU Taxonomy and the environment.
The Complementary Delegate Act?
The Complementary Delegate Act (CDA) is a supplementary act to the EU Taxonomy regulation that extends to activities not covered in the first EU Taxonomy Climate Delegate Act. The leaked draft text of the CDA communication revealed plans for nuclear energy and fossil gas activities to be classified as transitional activities in the Taxonomy. Read our previous blog post to learn more about EU Taxonomy.
Amid the criticisms and public discussions, the Member States Expert Group on Sustainable Finance and the Platform on Sustainable Finance responded to the CDA draft outlining several concerns regarding the environmental performance and usability. A few things that struck out in their feedback were:
- The Technical Screening Criteria (TSCs, determining whether an activity is sustainable) within the draft are not consistent with the provisions of the Taxonomy Regulation, , the underlying legal basis.
- New facilities generating energy from gaseous fossil fuels would start operating with emissions above the level of Do No Significant Harm and would not be required to reach the substantial contribution level at any stage over 20 years.
- Neither new nuclear energy facilities nor existing nuclear energy facilities should not be considered as Taxonomy-aligned because the activities do not meet the Do No Significant Harm requirements.
Read more on the platform feedback to the CDA Draft here.
Dissecting the Complementary Climate Delegate Act
Despite the worldwide backlash on the CDA, such as the IIGCC outlining how the CDA is undermining the EU’s commitment to climate neutrality by 2050, the European Commission adopted fossil gas and nuclear energy in the EU Taxonomy. As claimed by the European Commission, the decision “will accelerate the shift from more polluting activities, such as coal generation, towards a climate-neutral future, mostly based on renewable energy sources.”
However, experts say it’s a political greenwash. Eamon Ryan, the Minister for the Environment and Climate Ireland, acknowledges that we don’t need fossil gas and nuclear energy in the EU Taxonomy.
“Genuine green investments don’t include fossil gas and nuclear, and what the Commission has done by proposing to classify them as green puts a big stain on the label.”
Climate Action Network (CAN) Europe
Exploring the CDA further, GreenWatch’s Andreas Hoepner says that up to 1.4 billion tonnes of carbon dioxide equivalent emissions (CO2e) could be defined as green. He explained that gas-fired power plants could emit 11 tonnes of CO2e per kilowatt (kW) of capacity over 20 years (in line with the proposed average yearly emission of 550kg CO2/kW over 20 years) until they have to use carbon capture and storage (CCS) technologies or lose the “green by law” label, read more here.
Could this be the biggest greenwash in history?
We face this question as the sustainability industry takes a different direction. The short answer is YES! By labelling fossil gas as ‘green,’ it is impossible to limit global warming to 1.5°C and reach the 2030 climate targets of reducing fossil gas consumption across the EU. Additionally, defining nuclear as ‘sustainable’ breaches the Taxonomy regulation, which deems activities and investments as sustainable when they contribute to climate objectives and do no significant harm to other environmental objectives.
Can we still stop the inclusion?
The final rules published will go into effect in January 2023 unless 20 member states reject the plan or at least 353 Members of the European Parliament vote to block the rules within four months. So far, 250 MEP’s are committed to stopping the proposal, which leaves about 103 MEP’s to reach the 353 votes needed to block this proposal. Also, Austria, Luxembourg, Denmark, Spain, and Sweden have opposed the Taxonomy with Luxembourg threatening to file a legal suit at the European Court of Justice. Member countries aren’t the only ones considering legal action; NGO environmental groups like ClientEarth are already suing the EU over labelling bioenergy and plastics as green investments in the Taxonomy in the first Climate Delegate Act.
Our stance on the newly adopted CDA at GreenWatch
As a team dedicated to scrutinizing companies’ greenhouse gas performance to protect investors from greenwashing, we are appalled by this rushed and politicized decision by the EU. The European Union classifying nuclear energy and fossil gas as green would set us off track to reach the ambitions of the EU Green Deal