A total of 278 parliamentarians opposed the European Commission’s labeling proposal. To reject it, an absolute majority of 353 parliamentarians was needed. Because the Member States also agree, the green classification for gas and nuclear is now final.
GroenLinks MEP Eickhout spoke of ‘a disastrous signal to investors and the rest of the world’. His Labor Party colleague Tang called the vote “a painful and embarrassing setback for Europe as a leader in the fight against climate change.” Berendsen (CDA), on the other hand, praised the green labels as a sign of ‘taking responsibility’. According to the CDA member of the European Parliament, nuclear energy is clean and gas as a replacement for coal will bring the Paris climate goals closer.
The vote in parliament was eagerly anticipated, in parliament, at the Commission, in the Member States and outside Europe. The taxonomy, as the classification is officially called, was to become the ‘gold standard’ for investors. According to Eickhout and Tang, the vote undermines the credibility of both the labels and the EU.
Investing easier
The taxonomy is a practical guide for large financial investors such as pension funds. The taxonomy establishes criteria for what can be classified as green investments. This makes it easier for investors to invest their money in sustainable projects. In turn, companies that meet the criteria can borrow more cheaply.
Including investment in gas and nuclear power plants in the taxonomy has been the subject of long and heated debate in the EU. Partly under pressure from France (dependent on nuclear energy) and Germany (dependent on gas), the Commission nevertheless gave investments in these two sectors a green label. According to the Commission, gas is polluting, but necessary in the transition to sustainable energy (solar, wind, water, hydrogen). Until 2030, investments in gas-fired power stations can therefore be regarded as green, according to Brussels. For nuclear power stations (no CO2 emissions), the green label requirement is that there is a plan for the safe storage and processing of radioactive waste.
European Commissioner McGuinness (Finance & Capital Markets) defended this as a ‘pragmatic and realistic’ approach in times of high energy uncertainty. She contested the question of ‘greenwashing’, the sale of polluting activities as green.
Environmental groups and left-wing political parties have been doing everything they can in recent weeks to gather the necessary majority against the Commission plan. They hammered on the Paris climate goals but also pointed to the invasion of Ukraine by Russia and the need to get rid of Russian gas as soon as possible. According to these organizations, investing further in gas-fired power stations will prolong Russia’s energy dependence and thus be a gift for Russian President Putin.
Conservative forces in parliament proved stronger. The Christian Democrats and liberals received unexpected support this week from the Ukrainian energy minister, who called on the EU to produce its own gas in order to stop imports from Russia.
Luxembourg and Austria, countries with anti-nuclear governments, are likely to challenge the taxonomy in the Luxembourg Court of Justice. Greenpeace also announced a lawsuit.