The legislation means nuclear will now be labelled as a “green” energy source that could contribute to Europe’s transition to climate neutrality.
The commission said in a statement that the college of commissioners – a body made up of 27 policy commissioners – reached a political agreement on the text of the new regulations, known as a complementary delegated act, which could now become law on 1 January 2023.
It said a great deal of private investment is needed for the EU to become climate neutral by 2050. The taxonomy aims to guide private investment to activities that are needed to achieve climate neutrality.
The taxonomy does not determine whether a certain technology will or will not be part of a member state’s energy mix. “The objective is to step up the transition, by drawing on all possible solutions to help us reach our climate goals,” the commission said.
“Enabling investors to re-orient investments towards more sustainable technologies and businesses will be key in making Europe climate neutral by 2050.”
“Taking account of scientific advice and current technological progress, the commission considers that there is a role for private investment in gas and nuclear activities in the transition.”
The statement said gas and nuclear activities are in line with the EU’s climate and environmental objectives and will allow the bloc to accelerate the shift from more polluting activities such as coal generation, towards a climate-neutral future, mostly based on renewable energy sources.
The text of the actsets out clear and strict conditions, subject to which certain nuclear and gas activities can be added as transitional activities to those already covered by earlier taxonomy legislation that has been applicable since 1 January 2022.
One of the conditions is that gas and nuclear must contribute to the transition to climate neutrality. For nuclear, it must fulfil nuclear and environmental safety requirements.
More specific additional conditions are included in the act, including disclosure requirements for businesses related to their activities in the nuclear energy sector. This means investors that are not willing to invest in nuclear would be able to identify and invest in activities and financial products that have no exposure to economic activities in the nuclear sector.
For nuclear energy activities to be enlisted under the taxonomy, the screening criteria set requirements beyond the existing regulatory framework. For instance, sunset dates for accelerating the transition to advanced technologies, and definite dates for operational disposal facilities to be in place.
Key dates for nuclear in the taxonomy are:
- New nuclear power plant projects using best-available existing technologies will be recognised until 2045;
- Modifications and upgrades of existing nuclear installations for the purposes of lifetime extension, will be recognised until 2040;
- Disposal facilities for low-level waste must be operational already and member states should have in place a detailed plan to have in operation, by 2050, a disposal facility for high-level radioactive waste.
The text of the act follows expert consultations with the member states expert group on sustainable finance and the platform on sustainable finance. The commission has also listened to feedback from the European parliament. As a result of the feedback, targeted adjustments to the technical screening criteria and disclosure and verification requirements were introduced to reinforce their clarity and usability.
Mairead McGuinness, the bloc’s financial services commissioner, said the EU is committed to achieving climate neutrality by 2050 and needs to use all the tools at its disposal to get there. “Stepping up private investment in the transition is key to reaching our climate goals,” she said.
“Today we are setting out strict conditions to help mobilise finance to support this transition, away from more harmful energy sources like coal. And we are boosting market transparency so that investors will be able to easily identify gas and nuclear activities in any investment decisions.”
Once translated into all official EU languages, the act will be scrutinised for up to four months by the European parliament and the Council of the European Union.
Once the scrutiny period is over – and if there are no objections – the act will enter into force and apply as of 1 January 2023.
The taxonomy became law in July 2020, but legislators left important details to be resolved through complementary delegated acts – secondary legislation meant for technical issues that is not subject to the same degree of ministerial and parliamentary oversight.
Since then, the project has been overshadowed by a political row that culminated when EU leaders meeting in Brussels before Christmas were forced to abandon plans for a joint statement on energy policy. France wants a stamp of approval for nuclear, while Poland and eastern European states insist gas is labelled a sustainable investment.
Ten 10 EU countries have spoken out in support of nuclear power, saying it is “absolutely essential” it is included in the taxonomy.
In an opinion article in a number of European newspapers, the countries said nuclear energy is an affordable, stable and independent energy resource. Firstly, because it protects European consumers from price volatility, unlike gas. Secondly, because it contributes decisively to the independence of the EU’s sources of energy and electricity production.
Ministers from Germany, Austria, Portugal, Denmark and Luxembourg said they are against the inclusion of nuclear in the taxonomy, with Austria saying it will go to court to prevent nuclear being part of the taxonomy rules. Germany has also said it has not ruled out the option of legal action.
The commission began consultations on the text of the complementary delegated act with member states on 31 December.
It also consulted with a number of expert groups, including the Joint Research Centre (JRC), the commission’s scientific expert arm, which was asked to assess whether the EU should label nuclear power as a green investment. The JRC concluded in April that nuclear qualified as sustainable and does no more harm to human health or to the environment than other electricity production sources already included in the taxonomy.