EU Parliament Votes to call Gas and Nuclear Investments Green

The European Parliament has recently backed rules that label investments in gas and nuclear power plants as green. The European Union seems poised to pass the proposal into law, unless 20 of its 27 member states decide to reject it, which is highly unlikely.

The rules have been very contentious – Brussels redrafted the rules many times, unsure over whether natural gas plants should be considered green. For example, Slovakian prime minister Eduard Heger thought the result of the vote was good for energy security and didn’t compromise their 2050 target for carbon neutrality. Australia and Luxembourg both oppose nuclear power and have threatened to challenge the law in court.

Climate activists were steadfast against the decision and threatened to make legal challenge. Industry players welcomed the vote. The EU taxonomy aims to ensure that any financial products claiming to be eco-friendly is held to certain standards. For example, gas plants must switch to low-carbon gases by 2035.

Some European countries are embracing gas as it produces less emissions and than coal, so it can serve as an alternative as they attempt to transition to net-zero by 2050. Nuclear energy is “green” by emission standards but produces nuclear waste which must have proper storage.

Here are some comments by the interested parties:

Slovakian Prime Minister Eduard Heger commented that this good for energy security and emissions-cutting targets:

“We’ll remain on the way to climate neutrality by 2050”

EU financial services chief Mairead McGuinness said:

“The Complementary Delegated Act is a pragmatic proposal to ensure that private investments in gas and nuclear, needed for our energy transition, meet strict criteria.”

Austrian Climate Minister, Leonore Gewessler commented:

“It is neither credible, ambitious nor knowledge-based, endangers our future and is more than irresponsible.”

Anders Schelde, Chief Investment Officer at AkademikerPension (Danish pension fund):

“This is a poor signal to the rest of the world that may undermine the EU’s leadership position on climate action.”

We see this move as inevitable, due to the EROEI (Energy Returned on Energy Invested) on nuclear power and natural gas. The Russian/Ukraine conflict has only pushed this move closer as Europe will struggle to power their economy without the use of these energy sources.


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