Green taxonomy, review and opinions on the project
Paul Roberts
18 / February / 22
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Investments in natural gas and nuclear power plants receive a green EU label temporarily and under certain conditions. These energy sources are needed when switching from highly polluting sources such as coal, the European Commission believes.
On Wednesday, the commission presented a new addition to the so-called Green taxonomy, which determines which investments are and are not sustainable. This overview should provide clarity for investors who want to put their money into green goals.
In order to be labeled as green, natural gas plants must meet certain conditions. They must use the latest technologies to reduce CO2 emissions, and be used to replace coal-fired power plants. Nuclear energy must meet a set of safety and environmental requirements.
In 2035, the green stamp for gas will expire, for nuclear energy it will be 2045. The Daily EU administration recognizes that gas and nuclear energy are not renewable energy sources and not necessarily green, but they are necessary to achieve the climate goals. "Some parts of Europe are still heavily dependent on coal, so we need to intervene now," said Mairead McGuinness, European Commissioner for financial stability.
EU credibility is getting a blow
McGuinness acknowledged that opinions on taxonomy are "very divided". The Netherlands had called on the European Commission not to give natural gas a green label. The government supports the addition of nuclear energy.
Climate and environmental groups strongly oppose a sustainable stamp for both natural gas and nuclear energy. "With this decision, the credibility of the EU as a global climate leader gets a huge blow", says GroenLinks MEP Bas Eickhout. He still sees too many" goat paths " to consider polluting plants as sustainable.
The European Commission's plan can still be blocked by at least fifteen EU member states, with at least 65 percent of the population in the EU. The European Parliament has yet to vote on it. Austria and Luxembourg have already said they are going to court to challenge the inclusion of nuclear energy.
Taxonomy should avoid 'greenwashing'
McGuinness emphasized that the taxonomy only determines which investments are labeled as sustainable. The investment guide does not prevent money from being put into polluting energy sources, or that investors themselves apply stricter rules.
The EU wants to be climate neutral by 2050. To achieve this, CO2 emissions in the EU must already be reduced by 2030 by 55 percent compared to 1990. To do this, a lot of private investment is needed.
The classification system is of great importance for investors and investors who want to invest their money in sustainable projects and thus contribute to the reduction of CO2 emissions. The Green Investment Guide should also prevent financial products from being offered that are actually not at all as sustainable as the seller would have you believe. This is known as 'greenwashing'.
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Paul Roberts
Paul Roberts 51 years old Born in Edinburgh. Married. Studied at University of Oxford, Department of Public Policy and Social Work. Graduated in 1997. Works at Standard Life Aberdeen plc.
