EU Taxonomy, gas and nuclear investments are sustainable
For the Commission, they are necessary to reach climate neutrality in 2050.
But the delegated Act is not welcomed by everybody
Gas and nuclear as sustainable and necessary energies to reach climate neutrality in 2050. This is what the European Commission clearly stated in black and white in the supplementary delegated act of the taxonomy regulation at the beginning of February. For the European executive, “the Delegated Act intends to accompany the EU economy in the energy transition” and “will accelerate the private investments that are needed”. For many others, from environmental organizations to some member countries and even European politicians and commissioners, it is a betrayal of the commitment to respect scientific assessments and the ambition to create a complete, solid, and consistent world standard for the definition of green investments.
What is that
By Taxonomy we mean the set of criteria that classify economic activities as sustainable or not from an environmental and climate point of view. It is a unit of measurement, in essence, to guide private investments towards economic activities that operate for the energy transition towards the zero-emissions target in 2050. These are economic activities that must not cause ‘significant damage’ other environmental objectives envisaged by the EU General Taxonomy Regulation. Such as the circular economy, the reduction of pollution, the protection of biodiversity, the protection of aquatic environments.
In the complementary delegated Act presented at the beginning of February, the European Commission argues that gas and nuclear under certain conditions are to be considered as economic activities for the green transition because they can make a substantial contribution to the decarbonization of the energy system. The text, before being made public, circulated among member States and among experts to be evaluated. In particular, it was viewed by the experts of the “Sustainable Finance Platform”, a group created by the European Commission itself, who rejected it. In particular, according to experts, gas plants could only be considered with an emission intensity of less than “100 grams of CO2 per Kilowatt hour.” In addition, the construction of new nuclear power plants and the production of energy from those existing ones “do not meet the requirements of the Taxonomy Regulation” and “should not be considered” sustainable.
Concerning nuclear power, the delegated act concerns activities in the development of advanced technologies to minimize the production of waste; the construction of new reactors using the best technologies (they will be recognized until 2045); modifications and adaptations of existing nuclear plants to extend their life cycle (will be recognized until 2040). But one of the biggest problems is that of waste. All projects to be financed must have prepared “final deposits” for waste with low or intermediate levels of radioactivity, while those authorized after 2025 must present detailed plans to make deep geological repositories for wastefully operational by 2050. high level of radioactivity.
The Platform on Sustainable Finance pointed out that the Commission has not presented any “impact assessment” to elaborate on these conditions. In particular, deep geological repositories for highly radioactive waste do not yet exist anywhere in the world. Therefore, today there is no certainty of their effectiveness. In addition, the Commission asks the nuclear industry and the states to present plans for geological repositories, without specifying how they should be done and what principles and criteria they must comply with. It is a postponement of the problem, albeit a big one, to future generations.
As regards gas, the Delegated Act concerns the generation of electricity from fossil gaseous fuels; high-efficiency cogeneration of heat / cool and electricity starting from gaseous fossil fuels; the generation of heat / cool from gaseous fossil fuels in an efficient district heating and cooling system. As regards emissions, the Commission has established that all plants producing less than 100 grams of CO2 per kWh are admitted in the Taxonomy; it is a very low limit, already provided for by the General Regulations, and can only be reached by installations that use CO2 sequestration and storage systems or with the massive use of low-carbon gas. Furthermore, the Commission proposes to consider temporarily ‘green’, until 2030, also investments to plants with a heavier impact on the climate: those that produce up to 270g of CO2 per kWh, or that manage to maintain an annual average. of 550 kg of CO2 per kWh, calculated over twenty years.
“In essence, investments considered ‘green’ today could prove to be ‘significantly harmful’ tomorrow”, as the Italian journalist Lorenzo Consoli wrote. One criticism concerns the fact that the Commission has not analyzed the risk that investments that could and should give priority to renewables are diverted to this sector. While another attack, which comes mainly from the European Parliament, is that according to which the Commission has passed over the prerogatives of the co-legislators. The delegated act should be strictly limited to the technical field and implementing decisions, while in this case, it would seem that the Commission has forced its hand by inserting a fundamental and divisive political choice in a technical document.
The Delegated Act did not find unanimous support. Far from it: it also split the college of commissioners. Criticisms rained down from environmentalists, from the Greens of the European Parliament, and groups of the Left and the Socialists and Democrats. And also from a part of the European People’s Party, the same as President Ursula von der Leyen. Austria, Luxembourg, Spain, and Denmark also expressed their opposition to the text, and in the European executive, at least three or four commissioners voted against it. Among these, the budget commissioner, the Austrian Johannes Hahn, had announced his no in the days preceding the vote.
The next steps
Now the Supplementary Delegated Act will be formally transmitted to the co-legislators, which are Parliament and the Council, for scrutiny. Parliament and the Council will have four months to examine the document and, if they deem it necessary, to raise objections. Both institutions can ask to extend the control period by two months. The Council will have the right to raise objections with an enhanced qualified majority, which means that at least 72% of member states (at least 20 member states) are required to represent at least 65% of the EU population. The European Parliament can raise objections if the text receives a negative vote by a majority of its members in the plenary session (at least 353 MEPs). Once the monitoring period is over, if none of the co-legislators raises any objections, the supplementary delegated act will enter into force and will apply from 1 January 2023.
A rejection by the EU Council is unlikely, but Parliament may reach the threshold of 353 votes. However, there remains the possibility of an appeal to the European Court of Justice, already threatened by the governments of Austria and Luxembourg. The path that could also be taken by the European Parliament.
Sources:
https://ec.europa.eu/commission/presscorner/detail/en/ip_22_711
Giulia Torbidoni – PFE