What is green and what is not? That sounds like a simple question, but in Brussels the issue is a political minefield. The European Commission now wants to put gas and nuclear power plants on a list of sustainable investments.
Environmental clubs and a part of the EU countries express fierce criticism of the proposal. What exactly does the list mean and what does Brussels want to achieve with it?
The green taxonomy, that‘s the name of that list, is meant to be a kind of quality mark. It should provide clarity to investors what counts as a sustainable investment. For example, is an investor looking for a green inland shipping company to invest in? Then a condition is that there is no CO2 coming out of the chimney. Putting money in a fertilizer factory? Then you can call that investment green if that plant uses sewage as a source.
With the quality mark, the Commission wants to encourage companies to invest green and prevent companies from pretending to be more sustainable than they are. A company will not be able to just call a product ‘green‘.
When gas-fired power plants come on the list, they will therefore count as a sustainable investment in Europe. “If you want to build a new plant later, it could be cheaper,” says EU correspondent Sander van Hoorn. “Because because of the European quality mark, it is seen as a safe investment, which makes banks lend you money faster and charge less interest.”
Environmental clubs are critical of the plans. Gas plants are less environmentally polluting than coal-fired plants, but still emit a lot of CO2. Greenpeace thinks too much. It calls the European Commission’s plan a “license” for companies to pretend to be greener than they are. “Polluting companies will be delighted.”
But Brussels sees gas as a necessary transition fuel, says Van Hoorn. “Germany is closing nuclear power plants and has to cut off coal. The same goes for Belgium. There is simply not enough wind and solar energy to replace those plants.”
The decision to list nuclear power plants also sounds critical. The generation of nuclear energy does not release CO2, but the nuclear waste remains radioactive for thousands of years. Environmental organizations and countries such as Germany also point out the risk of a nuclear disaster.
The discussion shows where the political fault lines are in the European Union, says Van Hoorn. France, which has many nuclear power plants, wants Europe to stimulate nuclear energy. Germany is fiercely opposed to that. Eastern European countries would like natural gas on the sustainability list. They think the move from coal to solar and wind energy is still too great.
“The proposed list is a compromise that serves different purposes, the European Commission reasons. Countries such as France and the Czech Republic are very dependent on nuclear energy. If they have to switch to gas because they have to close nuclear power plants, you‘ll get much further away from the climate targets.”
The taxonomy does propose conditions when a power plant counts as ‘green‘. For example, nuclear waste must be stored safely, and a ‘green‘ gas plant must replace a (much more polluting) oil or coal plant. “And those demands become stricter over the years,” says Van Hoorn.
Yet critics fear that the Commission’s proposal will lead to less investment in solar and wind energy. Van Hoorn: “That is a big fear of the green parties in the European Parliament. Who say: if you can build a gas plant in expensively, why bother setting up wind farms? Moreover, they say, Europe has an exemplary function. Do you want to send a signal to the rest of the world that gas is green?”
The ‘green’ list is not yet final: the European Parliament and the Member States have yet to vote on it.