Explainer / What Is The EU’s Sustainable Finance Taxonomy And Is Nuclear Included?

By David Dalton
22 April 2021

The commission has published its first batch of rules under the EU’s taxonomy. But what is the taxonomy – and what does it mean for the nuclear industry?
What Is The EU’s Sustainable Finance Taxonomy And Is Nuclear Included?
The Belchatow coal-fired power station in central Poland. Fossil fuels are not part of Europe’s taxonomy, but nuclear could yet be included. Courtesy Wikimedia Commons.
What is the taxonomy? Stripped of bureaucratic jargon, it’s a package of regulations that governs investment in activities that the EU says are environmentally friendly. Think of it as an EU dictionary of what activities may and may not be called sustainable. The EU produced the taxonomy to help meet climate and energy targets for 2030 and reach the objectives of the European Green Deal, a package of environmental policies published in December 2019 that sets out how to make Europe the first climate-neutral continent by 2050. According to the European commission, the taxonomy lays out clear performance criteria for determining which economic activities make a substantial contribution to Green Deal objectives. The taxonomy restricts which investments can be classed as green. Establishing clear green criteria for investors is key to raising more public and private funding so that the EU can become carbon neutral by 2050 and to prevent “greenwashing” – the process of providing misleading information about how a company’s products are more environmentally sound. The commission estimates that Europe needs around €260bn a year in extra investment to achieve initial climate and energy targets to 2030.

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