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3rd Dec 2022

Legal action looms after MEPs back 'green' nuclear and gas

  • The taxonomy also split member states — with Austria and Luxembourg being the most outspoken opponent of including nuclear energy in the plan (Photo: European Parliament)
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The European Parliament on Wednesday (6 July) adopted the European Commission's proposal to include certain gas and nuclear investments in the EU sustainable finance plan — after failing to secure a majority to object to the plans.

The decision has sparked criticism from green, socialists and left-wing MEPs and the climate community.

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But the fate of the so-called EU taxonomy is still unclear, as environmentalists , lawyers, some MEPs and various member states are threatening to legally challenge the commission proposal.

"This is such a controversial and a bad decision that now you will be seeing countries going to court with good legal arguments," green Dutch MEP Bas Eickhout told EUobserver after the key in a plenary in Strasbourg.

The taxonomy is designed to provide certainty in financial markets, steering investments away from companies and investors which falsely claim to be environmentally sustainable and driving additional private financing into renewables.

However, according to Eickhout, the insecurity remains for investors because court cases will emerge from this decision.

"Investors will refrain from using this taxonomy as long as there is this legal uncertainty hanging above the market," he said.

For their part, leftwing MEPs said they will legally challenge the decision, dubbed a "betrayal" — an idea which was also mooted by S&D lawmakers ahead of the vote.

"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," Dutch socialist MEP Paul Tang told reporters in Brussels last week.

Yet, the parliament would need a majority to launch legal action against the commission — and the final result of Wednesday's vote on the objection to the taxonomy indicates that such a majority would be unlikely, Eickhout also said.

At least 353 EU lawmakers (out of a total of 705 MEPs) had to support the objection to kill the proposal.

But the text was rejected with 328 votes against, 278 votes in favour and 33 abstentions.

Vienna and Luxembourg

The taxonomy has also split member states, with Austria and Luxembourg being the most outspoken opponent of including nuclear energy in the plan, ever since it was presented — controversially — on New Year's eve 2021.

"Austria and Luxembourg will press legal charges and the court will rule about its legality," said Luxembourg minister for energy Claude Turmes, deploring the vote result.

Luxembourg is preparing to join a legal action to be initiated by Austria, the country clarified later in a statement.

Other countries like Denmark and Spain have said that the inclusion of gas and nuclear would undermine the credibility of the whole taxonomy.

Immediately after the vote, environmental campaigners including Greenpeace and ClientEarth said they will submit a formal request for internal review to the commission and pursue legal action if its result is negative. WWF also announced that it will explore "all potential avenues for further action".

"We will fight this in the courts … and are confident that the courts will strike down this politically-motivated greenwashing as clearly in breach of EU law," said Ariadna Rodrigo from Greenpeace.

Treaty clashes?

Lawyers from London-based nonprofit ClientEarth found last year that the classification of gas and nuclear as green in the EU taxonomy would clash with several EU laws — the Treaty on the Functioning of the European Union, the EU Climate Law and the Taxonomy Regulation itself — and international commitments under the 2015 Paris Agreement.

Czech prime minister Petr Fiala urged MEPs not to block the proposal ahead of the vote.

"This is a very fragile and balanced proposal, which allows a number of countries to meet their climate targets only thanks to criteria presented in the proposal," he said during a plenary debate.

The European Commission, for its part, welcomed the vote results, arguing that this is a "pragmatic and realistic" approach to help EU member states in the transition away from fossil fuels.

EU member states are divided over the role of nuclear and gas in the transition towards climate neutrality. Gas infrastructure still generates significant greenhouse gas emissions and managing radioactive waste can be costly and problematic.

The taxonomy guidelines, however, do not ban investments in activities not included in the guidelines

The vote is considered a victory for France, which generates the majority of its power from nuclear power — and has been pushing for the inclusion of nuclear power in the taxonomy thanks to a coalition with pro-gas southern and eastern Europe governments.

Magazine

Nuclear and gas in EU taxonomy slammed as 'greenwashing'

The EU's decision to include natural gas and nuclear power as "transitional activities" in its sustainable investments guidelines for green finance continues to generate massive controversy. Critics call it the "biggest greenwash ever."

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