Here I comment on the leaked EU Commission proposal regarding the role of nuclear energy and natural gas in the EU sustainable finance taxonomy. The taxonomy aims to inform investors on which investments in energy and other sectors are sustainable. This type of official EU categorization is supposed mitigate “greenwashing” and public doubt related to private sector categorizations. Therefore, it is important that the taxonomy investments are factually sustainable.
Nuclear energy
Nuclear energy should be included in the taxonomy. It is a very low emission energy source causing little environmental harm. We previously addressed the most common questions related to nuclear energy thoroughly in our Q&A.
In general, the proposed terms for the inclusion of individual nuclear energy projects in the taxonomy are sensible. Here I focus on few specific sections in the proposal that should be improved.
- It seems unnecessary to omit projects permitted after 2045, considering the sustainability of nuclear energy.
- Moreover, requirement to have geologic disposal sites ready by 2050 is quite strict, especially for nuclear energy projects permitted in 2045. It is also very restricting for the 2050 deadline to apply to demonstration facilities.
- The text uses lots of ambiguous phrasing on nuclear energy’s safety requirements. Instead of requiring nuclear energy to adhere to “best available technology”, “latest international guidance” or “most recent technical parameters”, it should refer to specific EU directives and classifications, that should be updated when necessary.
Natural gas
Natural gas should not be included in the taxonomy. It is a high emitting fossil fuel. Also, any increase in its use will very likely increase EU’s political dependency from Russia, a major gas supplier, which has demonstrated intolerable behaviour against EU’s values and safety.
If natural gas ends up being included in the taxonomy, it is important to keep its requirements at least as strict as they are currently proposed, as they strongly limit the future natural gas emissions. The taxonomy gives two options for natural gas projects:
- Life cycle emission below 100g CO2e/kWh, which basically means applying carbon capture and storage (CCS) technologies. This advances the adoption of CCS, which is important.
- Higher emitting new gas plants are allowed to be built only until 2030 and have multiple other restrictions. Mainly, they have to incrementally transition to using renewable and low-carbon gases (such as hydrogen) by 2035. This is a good requirement. The restrictions are, however, ambiguous for some parts:
- The energy generated may not be efficiently replaced by energy from renewable sources. It is very hard to interpret when this counterfactual scenario would take place.
- Facilities are only allowed for countries which have committed to phase-out of coal energy generation. At its current form, the phase-out condition is too lenient, since the phase-out is not given a deadline year, such as 2035 for example, but can be extended indefinetly.
Ville Seppälä
Chair, Finnish Greens for Science and Technology