What's the color of energy? That is the question now that the European Commission has proposed to temporarily label natural gas and nuclear energy as sustainable. Johan Barnard (Head International Public Affairs) and Claudia Kruse (Managing Director Global Responsible Investment & Governance) talk about the importance of a taxonomy on a scientific basis.
What exactly is this taxonomy?
"The taxonomy is an EU tool that defines which economic activities can and can't be classified as climate sustainable," says Barnard. "Brussels is trying to combat greenwashing with this. Big investors such as APG can use this classification to show their stakeholders how many sustainable investments they make. It is the explicit intention that the list of sustainable economic activities has a scientific basis."
And gas and nuclear power are not on this list now?
Barnard: "When drawing up the list, the European Commission deliberately left two subjects out of consideration: namely the generation of energy with natural gas and nuclear energy. There was a fear that a political joust would ensue over these subjects. On December 31, 2021, the Commission nevertheless made an additional proposal to put gas and nuclear energy on the green (sustainable) list, temporarily and subject to conditions. At the request of the Commission, two groups of experts looked into this: the independent Sustainable Finance Platform on the one hand and experts from the Member States on the other. The Sustainable Finance Platform issued a negative advice on Monday, January 24."
What are the arguments for and against the inclusion of gas and nuclear energy?
"Advocates of nuclear power, including France, want it on the green list," Barnard says. "This is because nuclear energy hardly leads to CO2 emissions. Opponents of nuclear energy point to environmental damage from discharging cooling water, the safety risks and the problem of nuclear waste. On the basis of the do no significant harm principle of the taxonomy, the Sustainable Finance platform concludes that nuclear energy has to be excluded from the green list. According to the Commission, the temporary labeling of gas as sustainable is necessary in order to be able to phase out energy sources in the short term that are even more CO2 intensive, such as lignite or coal. A less stringent limit for CO2 emissions would then apply to gas compared to renewable energy sources. The Sustainable Finance Platform believes there is no reason to deviate from the general CO2 limit and points out that the supply of renewable energy is already increasing strongly, so alternatives will indeed be available."