In March of 2018, the European Commission set forth an Action Plan for Financing Sustainable Growth (1). This plan included the creation of a European Taxonomy, a framework for assessing economic activities against six environmental objectives:
Climate change mitigation
Climate change adaptation
The sustainable use and protection of water and marine resources
The transition to a circular economy
Pollution prevention and control
The protection and restoration of biodiversity and ecosystems
An economic activity must meet 4 conditions to be recognised as aligned with the Taxonomy:
-making a substantial contribution to at least one environmental objective;
-doing no significant harm to any other environmental objective;
-complying with minimum social safeguards;
-complying with the technical screening criteria.
In March 2020, the EU released a first version of the Taxonomy focusing on climate change mitigation and adaptation objectives.
The EU Taxonomy is a guide for companies and investors seeking to establish credentials as being environmentally friendly (2). Companies can choose to meet the criteria of the EU Taxonomy in order to attract investors interested in green opportunities. Investors can use the criteria to identify investment opportunities having a positive environmental impact (3).
As of this writing, nuclear energy is not included in the Taxonomy, but there is strong pressure to change that. Ten member states of the European Union recently published a statement in several European newspapers (4) saying “It is vital that nuclear energy be included in the green taxonomy” and stressing its role against global warming. The statement was signed by France, Romania, the Czech Republic, Finland, Slovakia, Croatia, Slovenia, Bulgaria, Poland and Hungary.
Forty-six environmental NGOs wrote to Ursula van der Leyen, President of the European Commission, to ask for nuclear energy’s fair recognition in the EU Taxonomy (5). They deplore “the irrationality of some decisions being taken by several Member States – and increasingly also the Commission – targeting the normal development of nuclear energy.”
This misrepresentation, they assert, “has hindered the deployment of nuclear power, the European Union’ largest source of low-carbon energy, and forced us to keep fossil fuel plants online, hampering our efforts to fight climate change.”
So – what’s next? A review is underway, and a new revision of the Taxonomy is due to be published in December. But EU mechanisms are not so very simple (6), so keep tuned.
-Julie Wornan
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