European taxonomy: Berlin approves the “green” label for gas and nuclear

European taxonomy: Berlin approves the “green” label for gas and nuclear

The EU’s sustainable finance taxonomy is expected to temporarily label nuclear energy and fossil gas a ‘green’ label, a measure endorsed by part of German government and industry.

The European Commission’s proposal to include fossil gas and nuclear energy in the EU’s green taxonomy has drawn strong criticism in Germany. Few countries are so opposed to nuclear, while the inclusion of gas is difficult for the Greens to accept.

While observers expected the German government to relax its focus on the gas issue, given high gas prices and the tight supply situation, it did not.

“Natural gas is an important transition technology for us towards CO2 neutrality, and the inclusion of natural gas in the delegated act takes this into account”said Steffen Hebestreit, chief spokesman for Chancellor Olaf Scholz, on Wednesday (July 6).

He also underlined the government’s opposition to nuclear power.

Given that the Council is not expected to gather a majority of 20 countries against the Commission’s proposal, investments in nuclear and gas will be qualified as “sustainable” from January 1, 2023.

The tripartite government in Berlin has long been divided on the issue. The Greens categorically reject the idea of ​​affixing even a temporary sustainability label to nuclear energy and fossil gas, a position that has only intensified after Russia’s attack on Ukraine.

“Instead of a taxonomy that paves the way for our exit from energy dependence, it is Mr. Putin and the fossil energy giants who are now profiting from it”said Rasmus Andersen, leader of the German Greens in the European Parliament.

“The European Commission’s proposal waters down the right sustainability label”said in January Robert Habeck, Minister of Economy and Climate Action of the Greens.

If the Greens are appalled, the social democratic SPD and the liberal FDP had always welcomed the inclusion of gas.

Current Development Minister Svenja Schulze told COP26 participants that the inclusion of gas in the taxonomy was crucial for Germany. “If we can’t finance gas, then coal will be extended”she said.

The inclusion of gas in the conditionally sustainable energy category was “in line with the position of the federal government”a government spokesman said in January, after media reports of infighting over the issue.

Scholz loses interest in the subject

Chancellor Olaf Scholz has always been casual about this matter. He tends to emphasize that taxonomy is not “only a financial framework”.

Situation that delights German industry: “the European Parliament has overcome a major obstacle for the financing of the European energy transition”explained Holger Lösch, deputy CEO of the largest German industry association, the BDI.

“With the EU taxonomy, the way is now clear for financial flows in the transition from coal and natural gas to renewable and alternative gases — it gives the industry planning certainty. Gas is our transition technology for the renewable energy era “, he added.

Berlin divided over EU green finance rules

As the European Union finalizes its rules on green finance, a leaked draft proposing that nuclear and gas be labeled transitional energy has sparked complaints in Berlin, where the coalition divided on the subject.

No trial

While Austria and Luxembourg, just as opposed to nuclear energy as Germany, have long announced their intention to take the case to the Court of Justice of the European Union (CJEU), Germany tried to save time. Green ministers have said they “examined”the possibility of legal action.

Under pressure from their coalition partners, the German Greens were likely to abandon this possibility. “We do not consider that taking the case to court is the most appropriate decision in this situation”Mr Hebestreit told EURACTIV on their behalf.

The German Greens had previously refrained from opposing the taxonomy proposal in too obvious a way given that “Franco-German relations must not be affected by a new nuclear dispute. We need a compromise on sustainable investments”explained Sven Giegold, a leading political official, in November 2021.

French company EDF is seen as the main beneficiary of the taxonomy, as investments in its struggling nuclear fleet will likely be considered sustainable in 2023.

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