EU proposes to label some gas, nuclear investments 'green'

Investments in some gas and nuclear power plants are set to be labelled as sustainable under new rules proposed by the European Commission.

The plan was announced on Wednesday after Brussels took more than a year to decide if gas and nuclear energy should count as green investments in the EU's taxonomy.

The union's taxonomy constitutes a rulebook to guide investments to help raise the massive amounts of private capital needed to meet EU climate change targets.

With these rules, gas power plants would be labelled green this decade if they met an emissions limit of 270g of CO2 equivalent per kWh, or have annual emissions below 550kg CO2e per kW over 20 years.

Green EU lawmakers said on Wednesday they would campaign for the 353 votes needed to block the proposal, and already had roughly 250.

EU countries and the European Parliament have four months to potentially block the rules, which could be done by a super-majority of 20 out of the 27 EU countries - a threshold seen as unlikely - or a majority of lawmakers.

READ MORE: EU moves to label gas and nuclear energy as 'green'

'Greenwashing'

The new plan could greenwash gas plants with relatively high CO2 emissions today, provided they switch to low-carbon gas or reduce their running hours in later years.

Gas plants must also switch to run on low-carbon gases by 2035. A requirement in a previous draft, for plants to start switching in 2026, was dropped.

New nuclear plants must receive construction permits before 2045 to get a green investment label, and be located in a country with a plan and funds to safely dispose of radioactive waste by 2050.

The green labelling of nuclear and gas has faced opposition on multiple fronts, from its expert advisers on the rules, some investors and countries.

The opposition reflects broader divisions among governments over the path to meet the EU's goal of net zero emissions by 2050.

Austria and Luxembourg have threatened legal action if nuclear gets a green label, citing risks of accidents and nuclear waste. Pro-nuclear states, including France, say CO2-free energy is crucial to meeting climate targets.

Gas is similarly divisive, with some encouraging gas investments to phase out more-polluting coal, while others say labelling the fossil fuel as green would undermine the EU's leadership in fighting climate change.

If approved, the gas and nuclear rules would apply from January 2023, when providers of financial products must disclose what share of their investments comply.

READ MORE: Germany and France at loggerheads in the EU over ‘green’ nuclear energy