Paris, November 1, 2021 – A note containing proposals (1) for the inclusion of gas and nuclear in the taxonomy was sent to the European Commission on Friday, October 29, 2021. According to several sources (2), France played a central role in its drafting and allied itself with the European countries least inclined to act on climate. The Commission, other Member States and the European Parliament must reject these proposals if they want to ensure the credibility of the taxonomy (3) and the EU’s sustainable finance strategy.

Journalist Anne Hubert of the news website Contexte tweeted that the document in question is the work of “France and a number of other EU countries” who are trying to “force the hand of the European Commission”.

There were already suspicions about France’s role. In September, the French ambassador to the Czech Republic praised on twitter the Franco-Czech alliance and its work for the inclusion of gas and nuclear in the taxonomy.

If this undermining succeeds, Europe will have a “green taxonomy” that will block – rather than contribute to – the alignment of financial flows with the objectives of the Paris Agreement, according to the NGO Reclaim Finance.

In this case, many investors, both institutional and retail, will refuse to trust products aligned with the taxonomy. The investor group UN Principles for Responsible Investment (UN PRI) has already warned of the “risks of tarnishing investor confidence.” The well-established practice in the green bond market is not to include fossil fuels or nuclear power. The French Greenfin label – like several other international environmental labels – excludes nuclear.

At a time when it is crucial to mobilize the savings of European citizens to finance the transition, the Germans, but also the French, are mostly opposed to the development of nuclear power. Taxonomy is a central part of the European Union’s sustainable finance strategy. Its discrediting and unscientific nature would ruin the effectiveness of other financial tools that would refer to it. By qualifying activities such as gas – a fossil fuel (4) – as sustainable, the taxonomy would become a greenwashing tool, even though it was intended to limit these risks.

“As the most important climate summit of the decade gets underway, France is scheming to include fossil gas and nuclear power in the taxonomy, putting its nuclear industry ahead of the climate emergency. We strongly condemn this undermining, which, if successful, will be the death of a key piece of the European Union’s sustainable finance strategy. These actions are destroying the reputation that France built 6 years ago with the COP21. A few months before the French Presidency of the European Union, they do not augur well for France’s ability to decarbonize finance to make it a tool to reach European and international climate objectives. ” comments Lucie Pinson, Director of Reclaim Finance.

Press contacts:

Lucie Pinson, director, lucie@reclaimfinance.org, +33 (6)79543715

Angus Satow, press officer, angus@reclaimfinance.org, +447847754046

Notes:

1. The criteria for the inclusion of gas proposed in this note are even lower than those considered by the Commission a few months ago. For example, the proposed emissions threshold for gas is higher than current emissions from recent gas-fired power plants and than the average carbon intensity of European power generation. The leaked document in March 2021 had already attracted strong criticism from scientists, financial institutions and civil society, and the proposals were not adopted following the outcry. The new proposals may be deliberately more conservative in order to force a compromise similar to the March proposals. The new proposals are analyzed by WWF in its press release.
2. The source of the note has not yet been officially confirmed, but several sources link it to France. This hypothesis is credible insofar as the work of France alongside several countries – including Poland and the Czech Republic – championing gas is now proven and as the French government has already responded officially to be in favor of a gas inclusion “scientifically established”.
3. Reclaim Finance analyzes the various attempts to include gas and nuclear in the taxonomy and why they are not consistent with science in its report released in July 2021.
4. The proposals for gas inclusion could prevent the European energy sector from decarbonizing at a speed compatible with the Paris Agreement and achieving carbon neutrality by 2035 as called for by the IEA. They would also favor gas imports that are already strained and costly, both environmentally and economically.