European Union OKs Nuclear Power and Natural Gas for 'Green' Investment

English author Lewis Carroll would feel at home in Europe today, as European Union lawmakers voted to label nuclear energy and natural gas as "green." Back in January, much like Humpty Dumpty, it chose to declare that nuclear power and natural gas are green if they met certain criteria: The gas projects have to replace coal, with plans in place to switch to renewables or "low carbon gases"—probably a lifeline to hydrogen—by 2035. Nuclear power has to meet special standards for dealing with waste.

Europeans have been arguing about it since it was proposed and the European Parliament vote held on July 5 was an attempt to block the decision. It failed, getting only 278 votes when 353 were needed. 

And even with the limitations and qualifications, this is a big deal. Luca Bonaccorsi, sustainable finance director at Transport & Environment, said:

"This must be the biggest act of greenwashing in history; enacted by the same people that are supposed to protect us from the climate crisis. The sun won't set in the east just because a bunch of complicit politicians say so in a law. Nor will gas ever be clean and renewable. The laws of nature don't lie, but the taxonomy does. This bill will not stand up to the many legal challenges being announced, and it will be shunned by investors."

Greenpeace Europe's sustainable finance campaigner Ariadna Rodrigo said in a statement:

"It's dirty politics and it's an outrageous outcome to label gas and nuclear as green and keep more money flowing to Putin's war chest, but now we will fight this in the courts. The EU Commission's shameful backroom dealing on behalf of the fossil fuel and nuclear industries won't help them there. We're inspired by the climate activists here in Strasbourg this week and are confident that the courts will strike down this politically motivated greenwashing as clearly in breach of EU law."

Ukrainian climate scientist and Intergovernmental Panel on Climate Change (IPCC) member Svitlana Krakovska told The Guardian: “I am in shock. Russia’s war against Ukraine is a war paid for by climate-heating fossil fuels and the European parliament just voted to boost billions of funding to fossil gas from Russia. How in the world is that in line with Europe’s stance to protect our planet and stand with Ukraine?”

But is it such a big deal? Even the financial institutions that could now invest in gas and nuclear are choosing not to. According to the Financial Times, the European Investment Bank is ignoring the decision and other funds are as well. "In our view, fossil gas and nuclear should not have access to the same cheap financing as renewables as this inevitably will crowd out financing for the green transition, thus making its progress slower," said Anders Schelde, chief investment officer at Danish pension fund AkademikerPension.

Energy Cities is an organization that envisions "we will all be living in decarbonized and resilient cities with access to affordable, secure and sustainable energy" by 2050. Spokesperson Adrian Hiel tells Treehugger:

"The decision to include nuclear and gas as green investments is foolish rather than fatal. It pointlessly muddies the water of what is actually green. Our energy system is clearly decarbonising and decentralising - this political signal goes against that trend and the end result will be investments that become stranded assets. The energy transition will be slower and more expensive because of today's decision."

Hiel continues with a very Treehugger-like approach, discussing consumption rather than production, and demand rather than supply.

"Governments have a bad habit of trying to fix energy problems with a simple and wrong solution of adding more supply. The fastest and cheapest solution is to cut energy consumption and replacing polluting energy with clean renewables."

The American Reaction

Notwithstanding the nuance and the limitations, the immediate reaction in the U.S. was to attack President Joe Biden and the nonexistent Green New Deal, with tweets like, "Perhaps this should have been the first move here in the US prior to killing big oil and mandating Electric Vehicles" and, "This may be among the most important policy decisions of the decade. I can only hope that the US follows EU's lead." People who constantly sneered at socialist Europe suddenly see it as a role model.

But even The Wall Street Journal noted this decision doesn't open up Europe to gas:

"The com­mis­sion has said the con­di­tions for de­ter­min­ing which nu­clear and nat­ural-gas in­vest­ments can be in­cluded in the tax­on­omy set a high bar and should help en­sure that those ac­tiv­i­ties are con­tribut­ing to the over­all goal of cli­mate-change mit­i­ga­tion. En­vi­ron­men­tal groups and some law­mak­ers dis­agree, say­ing the stan­dards are too lax."

This is most definitely not "among the most important policy decisions of the decade." Instead, it is a compromise made to satisfy France's nuclear ambitions, Germany's need for gas to replace coal, and is about the inclusion of words in the European Union taxonomy—"a regulatory classification tool that helps investors, companies, and financial institutions to define environmentally sustainable economic activities." And, as Hiel tells Treehugger, "It is far, far from the most important decision and doesn't change the trajectory of where Europe is headed. ICE cars are dead, buildings will be renovated and renewables remain much, much cheaper."

But we will be hearing about it every time there is a proposal to ban or limit natural gas and probably any other discussion about fossil fuels. Because as Humpty Dumpty noted, words are what you chose them to mean.