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EU Proposes Green Investment Label for Nuclear and Natural Gas

by Olivia Lai Europe Jan 4th 20222 mins
EU Proposes Green Investment Label for Nuclear and Natural Gas

European Union countries divided over green investment label for nuclear power amid concerns over toxic waste and greenhouse gas emissions. 

The European Commission is considering recognising nuclear power and natural gas as a climate-friendly investment under a landmark EU classification system amid disagreements between EU countries. 

The EU’s executive branch unveiled a draft that would provide a green investment label for nuclear and natural gas power plants, which aims to facilitate the financing of new facilities for at least a decade and aid the fight against climate change. 

The new classification system known as the “taxonomy for sustainable finance” will be the first of its kind to differentiate between sustainable economic activity and greenwashing in the financial and investment sectors. The labelling scheme will set out criteria for investments in nuclear or gas-fired power plants for electricity generation as “sustainable”, which will direct green finance towards activities that contribute to reducing greenhouse gases.

But European countries have been divided over the decision. Environmentalists and countries including Germany oppose labelling gas-fired power plants and nuclear power as green energy, specifically citing the environmental impacts of nuclear waste.“We are against [the] greenwashing of nuclear energy… We have allies, among them Luxembourg, but of course also powerful opponents who are supporters of nuclear energy,” said Austrian chancellor Karl Nehammer. 

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One of which is France, who along with nine other EU countries have sent an open letter in October 2021 urging Brussels to recognise nuclear as a low-carbon and green energy source, as the country aims to revive its nuclear industry. French President Emmanuel Macron recently announced a €1bn investment in nuclear energy by 2030, with plans to build new “innovative small-scale nuclear reactors” in the wake of the energy crisis. 

Central European countries such as Poland and the Czech Republic, which need to replace their highly polluting coal-fired power stations, are also supportive of the proposed text as it will lower its financial costs for its energy transition. 

While nuclear power plants do not emit greenhouse gases, it does produce toxic waste, which could pose high risks of poisoning agricultural land, fishing waters or freshwater sources if not disposed of properly. Industries would need to invest and expand infrastructure in nuclear waste management. Though natural gas does emit greenhouse gas emissions, supporters of it say it is less polluting than traditional fossil fuels. 

As Brussels deliberates on its decision, the proposal does consider setting down a time limit under the green labelling. New nuclear power plants will have to have obtained a building permit before 2045 , and any work to extend the life of existing plants will have to be authorised before 2040.

About the Author

Olivia Lai

Olivia is a journalist and editor based in Hong Kong with previous experience covering politics, art and culture. She is passionate about wildlife and ocean conservation, with a keen interest in climate diplomacy. She’s also a graduate of University of Edinburgh in International Relations with a Master’s degree from The University of Hong Kong in Journalism. Olivia was the former Managing Editor at Earth.Org.

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