From 1 January, investments in gas and nuclear power plants in the EU can be regarded as climate-friendly. Around the turn of the year, the controversial addition to the EU taxonomy regulation will come into effect. A lawsuit from Austria at the European Court of Justice (CJEU) will not change this for the time being. A decision is not expected for two years. Experts assume that the new scheme will mainly lead to extra investments in existing nuclear power plants.
The purpose of the so-called taxonomy regulation is to advance the fight against climate change. This is done through a kind of catalog for climate-friendly investments, which is intended to help companies and individuals identify climate-friendly projects and invest money in them. Environmentalists and opponents of nuclear energy have criticized the inclusion of nuclear energy and gas under certain conditions last year.
Eastern states hope for more money for expansion
France, in particular, which supplies 70 percent of its energy needs with nuclear energy, has been a driving force in embracing investments in nuclear energy. Many other countries – especially Austria’s eastern neighbors – are hoping for more money from the new regulation for the expansion of their nuclear power plants. Germany, on the other hand, supported the plan because gas was identified as a transitional technology.
The rating sends “a catastrophic signal to international financial markets,” criticizes Parisian energy expert Mycle Schneider to the APA, and sees a “unique historic opportunity” missed. “Billions will flow to options that offer no relief from the climate crisis,” the expert predicts.
Refurbishment and maintenance of old systems in focus
According to Schneider, the money should be used less for new construction projects than for the renovation and maintenance of old nuclear power plants. He does not expect further expansion of nuclear energy in Europe and points to construction delays, lack of technical requirements and dependence on Russian nuclear fuel. The extra investment is therefore more likely to flow into nuclear power plant inventory and “perhaps more billions into development projects and construction sites that may never be completed,” says Schneider.
The expert emphasizes that the classification of nuclear energy and gas as sustainable is factually incorrect in both cases. “Natural gas is de facto a potent greenhouse gas — much more potent than CO2 — and nuclear energy creates de facto radioactive waste that will affect thousands of generations, clearly contradicting a fundamental principle of sustainability,” Schneider said.
Continue to use energy without political sanctions
The chief economist of the Nuclear Energy Agency (NEA), based at the Organization for Economic Co-operation and Development (OECD) in Paris, Jan Horst Keppler, disagrees. The classification of nuclear power and natural gas as “green energies” serves to continue exploiting both energies without financial or political penalties. “Since Europe will need both energies in the near future, that’s a good thing,” Keppler told APA.
However, it is a “soft” or indirect form of support. “It is an illusion to think that the taxonomy now automatically enables new sources of financing at a lower cost of capital,” says the expert. The criteria for environmental, social and corporate governance (ESG) are far too vague to lead to more than broad statements of intent from investors.
US financial flows are more important than those from Europe
In addition, there is a counter-movement to ESG in the US and US financial flows are more important than European ones. The financing conditions for nuclear energy and natural gas in Europe will therefore be determined in an interplay between the two financial centers and the national framework conditions in the European member states, Keppler predicts.
Source: Krone
I am Wallace Jones, an experienced journalist. I specialize in writing for the world section of Today Times Live. With over a decade of experience, I have developed an eye for detail when it comes to reporting on local and global stories. My passion lies in uncovering the truth through my investigative skills and creating thought-provoking content that resonates with readers worldwide.
