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Brussels controversially labels gas and nuclear energy as green despite a growing backlash

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By Jorge Liboreiro  & Christopher Pitchers
In this photo taken Sept. 27, 2011, some of the cooling towers of the Dukovany nuclear power plant rise high into the sky in Dukovany, Czech Republic
In this photo taken Sept. 27, 2011, some of the cooling towers of the Dukovany nuclear power plant rise high into the sky in Dukovany, Czech Republic   -   Copyright  Credit: AP   -  

Ignoring the furious backlash and accusations of greenwashing, the European Commission has decided to move forward with its highly controversial plans to label gas and nuclear activities as sustainable, hoping the two sectors can help the bloc meet its ambitious roadmap to climate neutrality.

The move has been under discussion for months and has been delayed several times due to deep-seated disagreements between EU countries, which have sent public letters and statements to make their cases. Brussels circulated a draft document on New Year's Eve, an exceptionally unusual date that reflects the explosive nature of the matter.

Following the feedback from governments, MEPs and expert groups – which featured "many diverging views", according to EU officials – the Commission has taken the official step of proposing a green label for certain gas and nuclear projects.

As a result, the two sectors will be included in the EU taxonomy, a technical rulebook that allows private and public investors to make informed choices about climate-conscious investments.

The taxonomy covers a long list of projects that make a "substantial contribution" to at least one environmental objective of the EU's climate policy while avoiding significant harm to any of the other five. The system has already labelled sectors such as solar energy, geothermal, hydrogen, wind power, hydropower and bioenergy as green.

The entrance of gas and nuclear into the taxonomy has raised the alarm among several member states and outraged civil society organisations, which have repeatedly warned the tweak will imperil the ongoing climate transition, undermine the bloc's international reputation and disregard the Paris Agreement.

Spain has said the plans "make no sense," while Austria and Luxembourg have invoked the possibility of a legal challenge against Brussels.

In its defence, the Commission stressed that both energy sources will be treated as "transition bridge" and will be subject to "strict conditions", verification mechanisms and transparency requirements.

"The EU is committed to achieving climate neutrality by 2050 and we need to use all the tools at our disposal to get there," said Mairead McGuinness, European Commissioner in charge of financial services, who described the latest proposal as a "political agreement."

Gas-powered plants under the taxonomy must replace facilities using coal, oil and other heavy fossil fuel, and ensure their emissions fall below a limit of 270g of CO2 per kilowatt-hour. They will also be required to switch to low-carbon gasses by 2035 and submit themselves to regular inspections.

The EU Platform on Sustainable Finance, an advisory group that was tasked with reviewing the draft decision before its publication, has rejected this reasoning, arguing no gas plant is green "at any point in its life."

For their part, nuclear plants will have to comply with high safety standards and minimise radioactive waste to be part of the taxonomy. New premises will be asked to use "best-available existing technology" and receive a construction permit by 2045 at the very latest.

A group of anti-nuclear EU countries, led by Germany, have forcefully contested the labelling of nuclear as sustainable given the high costs of construction and hazardous waste, which in their view violate the "do not harm" principle. But a wider, and equally vocal, pro-nuclear coalition, spearheaded by France, have defended the energy source as affordable, stable and independent, as well as comparably low-carbon Today, around 26% of the EU's electricity production comes from nuclear plants.

'Political stitch-up'

Speaking on condition of anonymity, EU officials admitted that neither gas nor nuclear are renewable and the final decision is a "balanced compromise that takes into account all views" and will be able to resist a potential legal challenge. Officials also said that an initial idea to create an amber category for both sectors outside the taxonomy framework failed to win "political traction," leading to their inclusion in the current catalogue, alongside solar and wind power.

The proposal "may be imperfect, but it is a real solution," said McGuinness. "[It is] science-based but also pragmatic and responsible."

The Commissioner insisted the labelling of gas and nuclear as sustainable will be temporary and its duration will depend on how fast renewables are deployed across the bloc. The new text will be reviewed and amended according to scientific and technology developments.

Environmental organisations reacted angrily to Wednesday's announcement, doubling down on their previous criticism. "This anti-science plan represents the biggest greenwashing exercise of all time. It makes a mockery of the EU’s claims to global leadership on climate and the environment," said Ariadna Rodrigo, a campaigner from Greenpeace. The EU office of the World Wildlife Fund (WWF) was similarly scathing, calling the proposal a "fiasco" and "political stitch-up" that will create a "huge mess" in the financial markets. WWF also accused the Commission of bowing down to pressure from France and its pro-nuclear allies.

McGuinness refuted the claims, arguing the taxonomy is a voluntary system unrelated to the EU's energy policy, which sets out binding targets for all member states.

"I think we have literally hosed away this concept of greenwashing by saying: Look, we stand by our proposal because it is transparent, because we are asking and insisting on full disclosure where there is investments in gas and nuclear," McGuinness told Euronews after the announcement.

"If anything, I think we have cleared muddy waters here."

Asked about discrepancies among the 27 EU commissioners, who are supposed to take decisions collectively, McGuinness said there was "overwhelming support" around the table. In the days prior to the announcement, Commissioner Johannes Hahn, who's Austrian, said he would vote against the text. The Financial Times later reported that Hahn, Elisa Ferreira and Josep Borrell opposed the plans.

The ball is now in the court of member states and MEPs, who have up to six months to analyse the Commission's proposal and raise objections. But since the text is a delegated act, the thresholds for blocking the text become more difficult to achieve.

In the Council, at least 20 member states representing at least 65% of the EU population will need to come together to derails the plans, something that seems far-fetched given that most countries depend on either gas or nuclear (or even both) to lower CO2 emissions.

The European Parliament will have to assemble an absolute majority of 353 MEPs to block the proposal, a scenario more feasible but that could still be influenced by national interests.

Regardless of the outcome, investors will still be allowed to pour money into gas and nuclear projects if they wish to do so. The taxonomy does not ban or allow investments – it simply serves as a transparency tool to channel more money into environmentally sustainable activities.

The Commission estimates the bloc needs €350 billion in green investments every year to meet the 2030 target of slashing greenhouse gas emissions by at least 55% compared to 1990 levels. A large part of this enormous amount of money, the executive says, will have to come from the private sector.