The delegated acts of the taxonomy published today ratify the inclusion of gas and nuclear in the EU taxonomy, not as “sustainable” activities but as “transitional activities”, for a limited period and under conditions (1). Henceforth, rejecting this decision would require an unlikely shift in the balance of power between member states or an exceptional mobilization of MEPs (2).
Paul Schreiber, Campaigner at Reclaim Finance, comments: “If the European Commission has not dared to label fossil gas and nuclear power as sustainable, they will fully benefit from so-called “taxonomy-aligned” financing, and therefore be financed by banks, investors and states claiming to contribute to the ecological transition. The taxonomy thus becomes a tool of institutional greenwashing, one that makes a mockery of the EU’s desire to position itself as a sustainable finance leader.”
The publication of the delegated acts closes a discussion that has divided member states since the Commission’s Technical Expert Group (TEG) recommended their exclusion in March 2020 (3). Gas and nuclear industries have been engaged in intensive lobbying ever since. By mobilizing 776 people employed in 182 companies and interest groups and spending €78 million per year, gas lobbyists secured more than one meeting every two days with EU officials from January 2020 to May 2021 (4). At the same time, the frequency of meetings between these officials and nuclear lobbyists also increased sharply (5).
The impact of this lobbying was largely reinforced by the support of states planning to develop gas and nuclear power, such as Hungary, Poland and the Czech Republic. France has played a key role in allying itself with these countries to secure a backroom deal allowing gas in exchange for nuclear (6).
By way of comparison, Russia – the world’s second largest gas producer – has excluded gas from its sustainable taxonomy (7). The Greenfin and Nordic Swan Ecolabel exclude gas and nuclear power, and such exclusions are also proposed for the European Ecolabel under construction.
Lucie Pinson, Director of Reclaim Finance, points out: “A taxonomy fueled by gas and nuclear cannot guide the decarbonization of financial flows. Fortunately, some investors understood this and know that they will not be able to convince their clients to put their money in funds labeled sustainable, but which contain gas and nuclear. On the contrary, they will be accused of greenwashing. We call on all financial actors to commit to excluding these two energies from any so-called green, sustainable or responsible product and bond.”
The EU’s own Platform on Sustainable Finance (8) as well as many sustainable finance professionals and groups – including the European organization Eurosif – have opposed the Commission’s proposal to include gas and nuclear and underlined it would sap the confidence in the new framework and make its usage more difficult. The European Consumers’ Association (BEUC) summarized this by denouncing “unacceptable institutional greenwashing”.
This position is shared by many financial institutions. The IIGCC (Institutional Investors Group on Climate Change) – an investor group made up of more than 370 institutions and with more than $50 trillion of asset under management – opposed the inclusion of gas, saying that it would “undermine the credibility of the taxonomy as well as the EU’s own commitment to climate neutrality by 2050”. Several individual financial institutions took similar positions on gas and/or nuclear, such as Mirova in France, Achmea in the Netherlands and GLS in Germany (9).
A summary of the content of the delegated act and a detailed analysis of the criteria used for fossil gas and nuclear is available below: