Posted on 02 February 2022
The European Commission has today bowed to pressure from France and others (1), by publishing a set of sustainable finance rules which will do huge damage to the EU and global environmental action
The Commission officially classifies fossil gas and nuclear power as environmentally sustainable under the EU Taxonomy - the EU’s “green” investment guidebook - despite the fact that fossil gas generates huge emissions, and nuclear power creates highly radioactive waste which we still do not know how to handle.
This creates a benchmark that lags behind the existing green bond market, which excludes gas and nuclear, and risks directing billions of euros towards these harmful industries. Only last week, the European Commission’s scientific advisers on the Taxonomy slammed
the Commission’s proposal
, saying that it was “not in line with the Taxonomy Regulation,” and posed a “serious risk of undermining the sustainable Taxonomy framework”.
The Commission’s proposal is meant to flesh out the details of the robust EU Taxonomy regulation,
whose Article 19 requires the Taxonomy criteria to be built on science, not give special treatment to certain technologies, and be easily verifiable. However, the new gas and nuclear criteria violate each of these requirements and are thus inconsistent with the regulation. WWF calls on the EU Parliament and Council, which each have a yes/no vote on the proposal, to reject it.
Ester Asin, Director of WWF European Policy Office, said:
“The huge pressure by some European governments’ pet industries has led to this proposal. The Act adopted by the Commission today would rig Europe’s financial system against the planet. They must think again and keep gas and nuclear out of the Taxonomy”.
France has been pushing for months to have nuclear power included as sustainable in the EU Taxonomy. In exchange for the support of Poland, Hungary, the Czech Republic, Slovakia and more on nuclear energy, the French government agreed to proactively support a scientifically baseless inclusion of fossil gas.
Germany and Italy supported the inclusion of gas but opposed nuclear.
On the side of scientific evidence stood Spain, which opposed the inclusion of both gas and nuclear, while a group of Member States like Austria, Denmark, Luxembourg and Portugal oppose nuclear. The Austrian government has promised to present a legal challenge to any Act that contains nuclear power. While some Member States were involved in drafting the proposal, the European Parliament - and citizens - were completely excluded from the process.
Many investors and banks have already made it clear they do not support a greenwashed Taxonomy (2) - a system that was explicitly designed to identify green economic activities in a clear and transparent manner for investors. Today’s text is splitting the finance market - against the taxonomy aim to unify markets’ approaches - and slow down the transition.
Sebastien Godinot, Senior Economist at WWF European Policy Office, said:
“The European Commission has allowed European governments to drag this Taxonomy Act into the gutter - and this fiasco is going to create a huge mess in financial markets. Scientifically speaking this Act is a fraud, which must be rejected to protect the credibility of the whole EU Taxonomy. No right-minded financial institution should use this Act to make its green finance decisions, since they would still be exposing themselves to the risks of greenwashing, reputational damage, stranded assets, lock-in, and legal complications.”
Henry Eviston, Sustainable Finance Policy Officer at WWF European Policy Office, said:
‘’In a disgraceful process, the European Commission has engaged in a political stitch-up with Europe’s governments. The final gas and nuclear criteria are even worse than in the draft, which was slammed by the EU Platform (3). By setting the bar lower than the existing green bond market, the EU is losing its green finance leadership and sending a totally counterproductive signal globally. Politically, the European Parliament has been treated as a second-class institution. It cannot just rubber-stamp this decision by European governments: it must reject this act”.
(1) France has led a coalition of European governments in laying the groundwork for a ‘gas-for-nuclear swap’ in a deal dubbed the ‘French proposal’.
France, Poland, Hungary, Sweden, Finland, the Netherlands, the Czech Republic, Romania, Slovakia, and Slovenia have advocated in favour of nuclear power’s inclusion in the EU Taxonomy.
Poland, Hungary, Greece, Bulgaria, the Czech Republic, Romania, Croatia, Cyprus, Malta, Italy and Slovakia have openly advocated in favour of the inclusion of fossil gas in the Taxonomy.
(2) For example:
(3) See EU Taxonomy: Commission’s expert group says no to EU’s greenwashing of fossil gas and nuclear energy
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