Tensions among policymakers are rising over an EU plan to label gas and nuclear investments as green, with experts who are advising the EU Commission asking for a new “amber” label for investments that are not fully sustainable.
The Commission last month proposed including gas and nuclear energy in the EU’s sustainable finance taxonomy, a system for labeling certified climate-friendly investments.
The proposal split opinion among the European Parliament and member states, who could yet reject it. It also faced criticism from some investors and an expert group advising the Commission, which said the plan failed to provide the intended “gold standard” for sustainable investing by labeling polluting investments as green.
The proposal would label as sustainable gas plants that commit to run on low-carbon gases by 2035 and have annual emissions below 550kg CO₂e per kW over 20 years—meaning their current emissions levels could still be relatively high.
The experts are set to recommend that the EU limits the green label to fully-sustainable investments, and suggest gas and nuclear could be shifted to a semi-sustainable "amber" category.
A draft of the recommendations, seen by Reuters, would propose a traffic light system: red for investments that significantly harm the environment, amber for those with a lesser impact that could aid the transition, and green for those that substantially help to fight climate change. The draft could change before it is due to be published on March 21.
The advice looks set to cause more wrangling over the rules. EU financial services commissioner Mairead McGuinness on March 22 said she did not support an “amber” label, but said some EU lawmakers did.
The proposed gas and nuclear rules could be blocked if a majority of the parliament’s 705 lawmakers, or 20 of the EU’s 27 countries reject them.
Gas emits less CO₂ than coal when burned, and some countries had lobbied hard for rules to incentivize gas investments to help them phase out coal. The invasion of Ukraine by Russia, Europe’s top gas supplier, has intensified that debate, however, with the EU now vowing to quit Russian gas faster.
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