Austria sues EU commission over labelling gas and nuclear 'green'

"We're in talks with other EU governments who could join us as supporting parties in the proceedings," Austrian environment minister Leonore Gewessler told a press conference on Monday.

Vienna is looking for support from other member states beyond Luxembourg, which has already voiced its support for a lawsuit.

During last year's COP26, Austria and Luxembourg formed an alliance with Germany, Portugal and Denmark to keep nuclear energy out of the taxonomy — but Spain has also been one of the most vocal opponents, considering neither nuclear nor gas as a sustainable investment.

The taxonomy, controversially presented during New Year's Eve and adopted before the summer, allows certain investments in gas and nuclear under the category of "transitional economic activities".

While designed as a science-based investment tool to steer investment away from companies which falsely claim to be environmentally-sustainable, critics argue the green label for nuclear and gas gives credence to claims of greenwashing, creates confusion in financial markets, and will cause major delays in the transition from fossil fuels.

"There must be no greenwashing programme for investments in nuclear power and fossil gas. It is neither credible, ambitious nor knowledge-based, endangers our future and is more irresponsible," said Gewessler.

The anti-nuclear movement in Austria goes back to the 1970s when a vote in a referendum eventually saw a slim majority rejecting nuclear power in the country.

But Gewessler also said that labelling gas as green was undermining the EU's whole green finance package. "Calling climate-damaging natural gas green is misleading".

Legal loophole?

Austria argued that the inclusion of gas and nuclear clashes with the taxonomy regulation itself and the underlying environmental 'do no harm' principle — but Vienna has also identified procedural problems related to the way the commission adopted this delegated act.

Delegated acts are adopted by the commission to amend or complement EU law, after consulting experts from member states.

However, according to an EU official, the commission has ignored member states' concerns regarding the taxonomy.

Legal action from Vienna follows a lawsuit from a group of civil society organisations, including Greenpeace and ClientEarth, over the classification of gas and nuclear as green investments.

The commission said it has taken note of the legal action but would not comment on the substance of the case.

"The EU's taxonomy is to a very large extent focused on renewable energies. Renewables will continue to be the focus for green investors and the creation of green financial products," a commission spokesperson said.

"We included gas and nuclear … in a limited number of circumstances and under strict conditions … [because] gas and nuclear are recognised as important parts of the transition in several member states".