Von der Leyen: Russian war causing 'uncertainty for investment'

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The EU’s green taxonomy is a system of classification that determines which investments are environmentally sustainable. A furious and ongoing debate over whether to include nuclear energy and gas in that taxonomy – which would incentivise private investment – has been dragging on and tensions are close to boiling point.

MEPs are set to meet again today as they lock horns over the issue, with a vote to follow on Wednesday afternoon.

Ukraine has demanded that natural gas, a fossil fuel, be kept out of the taxonomy as this would be a “very clear gift to Putin to feed his war machine against Ukrainians”.

And a number of MEPs have also lobbied against this measure on the basis that labelling gas-fired power plants as a green “transition” fuel will boost gas purchases from Russia.

But Germany, which is hugely reliant on gas (a third of which is supplied by Russia), has demanded that natural gas be included in the taxonomy, meaning it can continue to send Moscow billions.

Berlin maintains that gas should be used as a transition fuel to help Europe move away from the dirtiest energy sources on its route to net zero.

Poland and Bulgaria have also lobbied for the taxonomy to encourage gas investments to help them phase out coal, the dirtiest fossil fuel.

But Svitlana Romanko, an environmental lawyer and campaign leader at Stand With Ukraine, said: “MEPs have to veto the EU taxonomy delegated act because it violates the human rights of Ukrainians, which are still under huge abuse with the Russian war against Ukraine.”

Ukrainian ambassador to Germany Andrij Melnyk has also called on German lawmakers to reject the proposal in a furious letter.

It read: “For Russia’s gas industry, the taxonomy would open up a ‘multitude of opportunities’, Russian Energy Minister Nikolai Shulginov happily declared.

“On the other hand, LNG terminals, in particular, are not considered eligible. The terms of the taxonomy thus clearly favour Russian gas. Gazprom, Rosatom and Lukoil have apparently lobbied Brussels accordingly.”

It added that “unfortunately your only option is to reject the existing delegated act. I remain hopeful of your support”, as the European Parliament cannot introduce amendments

France, which gets 70 percent of its electricity from nuclear, has been the leading voice pushing for this energy source to be added to the list.

But there are concerns over the sustainability of nuclear energy due to the radioactive waste it produces, despite not causing any direct carbon emissions once up and running.

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France and Germany’s demands, which have sparked fury, need at least 20 countries representing 65 percent of the EU population to object to the label to defeat it.

The Parliament only needs a majority (353 MEPs) to block the delegated act.

DNR, Germany’s umbrella organization for environmental NGOs, estimates that around 260 MEPs are willing to vote down the proposal.

The Greens, who are holding a press conference in Strasbourg this morning called “Not my Taxonomy”, are also not keen on the plans either.

EU lawmaker Paul Tang has warned that some European Parliament members will attempt to sue if gas and nuclear do get labelled as green. Mr Tang, who is part of the EU Parliament’s negotiating team on the taxonomy, said: “The parliament will definitely try to go to court … We will argue that it goes against the primary legislation and we’re definitely going to fight for that.”

Mr Tang is also the rapporteur for the Socialists & Democrats in the centre-right EPP group, which is reportedly split over the issue. But he claims that around 80 percent of the group would vote against it.

The plan could be rejected on the grounds that investments must contribute “substantially” to one of six environmental goals if it is to be considered green, and not threaten others.

And while the taxonomy was set up as part of the European Green Deal in July 2020, to prevent “greenwashing” in certain investments, critics say gas and nuclear’s inclusion in the taxonomy is a form of “greenwashing”.

Luxembourg, for instance, has threatened to sue the commission over its plans to classify nuclear energy as “green”. Austria also vehemently opposes the plans to include nuclear in the EU’s green taxonomy and has also threatened legal action.

Denmark too argues that it is not right to label natural gas as “green” because it is a fossil fuel. But the financial services commissioner rejects these claims, arguing that the investments would be clearly labelled as part of the voluntary tool, which is not an energy policy.

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