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EU lawmakers move to block green investment label for gas and nuclear
Global Banking & Finance Review®
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By Kate Abnett
BRUSSELS (Reuters) – European Union lawmakers will attempt to block a plan to label gas and nuclear energy as sustainable investments as Europe wrestles with reducing its carbon dioxide emissions to address climate change.
The European Commission, which is the EU executive, this year proposed including gas and nuclear in the bloc’s sustainable finance taxonomy, a system for labelling climate-friendly investments.
“The European Commission has violated the spirit and letter of the law by labelling highly controversial and polluting energy sources as ‘sustainable’,” Green lawmaker Bas Eickhout, one of the signatories to a resolution to veto the rules, said.
The Commission proposal was arrived at after nearly two years of internal EU wrangling, and split opinion among members and lawmakers, who disagree on the green credentials of gas and nuclear.
The resolution brought by lawmakers said gas and nuclear could not be considered sustainable based on the underlying EU law on the taxonomy, and would cause confusion among investors.
EU lawmakers were not given “proper opportunity” to provide comments before the Commission published the proposal, it added.
By reserving the “green” label for only investments that are truly climate-friendly, the taxonomy was designed to help steer billions of euros into the low-carbon investments needed to meet EU climate goals.
An original Commission proposal followed a recommendation to not label gas plants as green, because of their planet-warming CO2 emissions. The final EU proposal came after lobbying from countries that said investment in gas was needed to help them to phase out coal, which is more polluting.
Countries are also divided over nuclear energy, which is CO2-free but produces radioactive waste.
Although the resolution was submitted by 16 lawmakers from groups representing a majority of the European parliament, few have a firm position on the rules, so the overall level of support is unclear.
At least half of parliament’s 705 lawmakers would need to reject the rules. Two committees will vote on the resolution next month, followed by the full assembly.
The rules could also be rejected by 20 of the EU’s 27 countries, a threshold seen as unlikely to be reached.
(Reporting by Kate Abnett; Editing by John Chalmers and Alexander Smith)
Sustainable finance refers to financial activities that consider environmental, social, and governance (ESG) factors, aiming to promote investments that contribute to sustainable development.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the day-to-day operations of the EU.
A financial taxonomy is a classification system that categorizes financial products based on their sustainability and environmental impact, helping investors identify eco-friendly investment options.
Carbon dioxide emissions are greenhouse gases released into the atmosphere, primarily from burning fossil fuels, which contribute to climate change and global warming.
Investor confusion occurs when investors are uncertain about the classification or sustainability of financial products, which can lead to misinformed investment decisions.
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