German government split over EU plans to label gas as sustainable
Germany鈥檚 new government has criticised a proposal by the European Commission to classify nuclear energy as a sustainable investment, but ministers from the different coalition partners are split on the inclusion of certain fossil gas projects.
Politicians from all three coalition partners 鈥� the Social Democrats (SPD), the Green Party and the FDP 鈥� have come out in opposition to plans to label nuclear as sustainable. Development minister Svenja Schulze (SPD) called the proposal 鈥渨rong at EU level鈥� and 鈥渁bsurd鈥� on the global scale. 鈥淣uclear power is too risky, too expensive and too slow to help the world with climate action,鈥� she .
It is questionable whether this greenwashing will find acceptance on the financial market at all.
Economy and climate minister Robert Habeck the proposal 鈥渄ilutes the good label for sustainability鈥� and said he did not see the German government agreeing to it. 鈥淭o label nuclear energy as sustainable is wrong for this high-risk technology.鈥� The Green Party leader added that 鈥渋t is questionable whether this greenwashing will find acceptance on the financial market at all鈥�. The government would now assess the proposal.
At the same time, Habeck said it was 鈥渜uestionable鈥� whether fossil gas should be included in the taxonomy. He added that 鈥渁t least鈥� the Commission made clear that fossil gas would only be seen as a transitional fuel and that it must be replaced by green hydrogen.
Finance minister Christian Lindner from the pro-business FDP, however, fully welcomed the inclusion of fossil gas. 鈥淩ealistically, Germany needs modern gas-fired power plants as a transitional technology because we are doing without coal and nuclear power,鈥� . 鈥淲ith a view to climate neutrality, the plants should later be able to be used with hydrogen.鈥� For this reason, he said, the German government had pushed to make the relevant investments possible. 鈥淚 am grateful that arguments have obviously been taken up by the Commission,鈥� Lindner said, and called for 鈥渇urther improvements鈥�, without providing details.
Government spokesperson Steffen Hebestreit also said investments in hydrogen-ready gas plants are necessary. "Therefore, the proposals of the EU Commission's delegated act with regard to gas are in line with the position of the German government, even if such an "act" would not have been needed from our point of view," he told reporters in Berlin. He added that the government would now assess the full text and find a "coordinated position".
News agency Reuters that leaders of the three coalition partners agreed to avoid a fight against the European Commission's compromise proposal and simply abstain in the vote when EU leaders will have their final say at a summit later this year, according to two people familiar with the decision.
The split among the coalition partners had become apparent even before the government was sworn in. Media had reported that the Greens had pushed for a sentence in the coalition treaty in opposition to labelling both nuclear and gas as sustainable. The final treaty does not mention the taxonomy. Leading SPD politicians had come out in favour of including fossil gas, while Green Party officials had opposed the move.
Decision 鈥渟everely damages the credibility of the taxonomy鈥� - NGO
The German energy industry has welcomed the planned inclusion of gas projects in the taxonomy. 鈥淚nvestments in hydrogen-capable gas-fired power plants are imperative for the transition to a completely climate-neutral energy supply in the European Union,鈥� Kerstin Andreae, head of industry association BDEW. In order to ensure security of supply, Europe would need natural gas for some time as a partner to renewable energy sources.
However, the German Renewable Energy Federation (BEE) - a vocal promoter of renewable energies and an umbrella organisation for several renewable energy associations - . Neither natural gas nor nuclear power even came close to meeting the criteria of sustainability. "Natural gas must only be used to a limited extent so as not to burn taxpayers' money as a "stranded investment" in infrastructure and power plants in the foreseeable future," said BEE president Simone Peter.
German finance watchdog NGO B眉rgerbewegung Finanzwende criticised the Commission鈥檚 draft as greenwashing. 鈥淏y caving in to national interests, the Commission is doing a disservice to sustainable financial markets in Europe,鈥� said Magdalena Senn, policy advisor for sustainable financial markets. The inclusion of nuclear and gas 鈥渟everely damages the credibility of the taxonomy,鈥� she added.
Think tank E3G also the plans. To "keep the integrity and relevance of the taxonomy", a public consultation had to take place, a majority of the European Parliament has to reject the proposal, and a strong diplomatic push from member states "advocating for a truly green taxonomy," said sustainable finance advisor Johannes Schroeten. "Germany is a key player and has to voice clear opposition against gas and nuclear in the taxonomy."
European Commission: Nuclear and gas projects sustainable investments 鈥渦nder clear and tight conditions鈥�
罢丑别听聽that defines and ranks environmentally sustainable economic activities as a framework for markets to decide what is truly green. It is meant to channel billions of euros of investments to support the 鈥� its sustainable growth strategy.
The European Commission on 31 December to allow some fossil gas and nuclear projects to be labelled sustainable investments under the EU taxonomy 鈥渦nder clear and tight conditions鈥�. The Commission wants to give a temporary green label to gas projects that replace coal and emit no more than 270 grams of carbon dioxide equivalent per kilowatt-hour, according to the draft regulation, . Nuclear energy could be classified as sustainable as long as new plants that are granted construction permits by 2045 meet a set of criteria to avoid significant harm to the environment and water resources.
The proposal will now be scrutinised by the Platform on Sustainable Finance and the Member States Expert Group on Sustainable Finance, before the Commission adopts a final delegated act in January. It will then be sent for review to the European Parliament and the member states. They have four months to object to the document. However, only a large majority can prevent it, which is seen as unlikely. The European Council of member state governments will have the right to object to it by 鈥渞everse reinforced qualified majority鈥� (which means that at least 72 percent of member states, i.e. at least 20, representing at least 65 percent of the EU population are needed to object to the delegated act), and the European Parliament by simple majority (i.e. at least 353 MEPs in plenary).
The Commission鈥檚 proposal did not come as a surprise. President Ursula von der Leyen and several of her commissioners had hinted over the past weeks that both nuclear and natural gas would be labelled as sustainable. The German government was involved in recent deliberations as well. Officials, including Chancellor Olaf Scholz, have said that there have been 鈥渋ntensive鈥� talks with partners like France and the Commission over the proposal since mid-December.
Joint front of some member states against inclusion of nuclear
Each member state of the European Union determines its own energy mix, but energy markets in Europe are becoming more and more integrated and interdependent physically, economically, and from a regulatory perspective. The taxonomy debate shows that there is considerable disagreement over the right path to climate neutrality 2050 鈥� a key goal of the Green Deal.
The question of whether to include gas and nuclear in the taxonomy has divided the EU for some time, with France and other nations pushing for the inclusion of nuclear, a technology which causes very little greenhouse gas emissions. Countries like Germany have said that fossil gas should receive a sustainability label as a transitional fuel, arguing that it is a less carbon-intensive alternative to coal in the medium run. Even if the Commission had decided not to include the two technologies, this would not have forbid investors from putting money into nuclear and gas projects.
Austria and Luxembourg are also among the countries that have criticised plans to include nuclear in the taxonomy. Austria鈥檚 minister for climate and energy, Leonore Gewessler, both nuclear and fossil gas should be excluded and her country would sue if the proposal was enacted as planned. 鈥淣uclear power is dangerous and no solution in the fight against the climate crisis,鈥� she wrote in a message on Twitter. Luxembourg鈥檚 energy minister, Claude Turmes, said he would examine the proposal in detail and talk about the next steps with both Austria鈥檚 and Germany鈥檚 governments.
The taxonomy debate foreshadows heated discussions on other parts of the EU Green Deal in the coming months. The EU is knee-deep in the legislative process to overhaul all major climate and energy laws. The Commission has proposed drafts with its 鈥淔it for 55 package鈥�, which are now being debated in the European Parliament and the Council.
Nuclear power 鈥渂ridge to nowhere鈥� 鈥� German media reactions
Most media comments in German newspapers are rather critical of the EU鈥檚 proposal. The Frankfurter Rundschau it would put natural gas plants and nuclear reactors on a sustainability level with wind and solar power. 鈥淒anger of radiation? Nuclear waste that needs to be stored safely for a million years? Massive environmental damage due to uranium mining? All of this apparently doesn鈥檛 seem to concern the EU Commission (鈥�) It couldn鈥檛 be more absurd.鈥�
The Tagesspiegel from Berlin that the EU proposal is merely 鈥渁n expression of a rigid pursuit of interests by French President Emmanuel Macron.鈥� While Germany plans to shutter its three remaining nuclear plants at the end of the year, France wants to invest a billion euros throughout the decade into mini-reactors, writes Tagesspiegel. 鈥淚f the EU Commission鈥檚 plan is accepted, and this seems to be the case, Macron can expect to receive more money for a technology that really doesn鈥檛 deserve the label 鈥済reen鈥�,鈥� the newspaper said, concluding that EU Commission leader Ursula von der Leyen 鈥渉as been caught napping鈥� by the French President.
The S眉ddeutsche Zeitung it is 鈥渢elling that there is no final repository decades after the first reactors started operation.鈥� Even if nuclear power is considered as a bridge technology, 鈥渢his would be a bridge to nowhere.鈥� Building new nuclear plants takes many years, meaning the technology does not help with respect to short-term emissions reduction targets, the newspaper writes. Moreover, cost increases for the technology, as it was the case with British plant Hinkley Point, are likely to make nuclear increasingly unattractive for investors 鈥渄espite Brussel鈥檚 green label.鈥�
The : 鈥淣uclear power is CO2-free. This is why the climate movement is split over the question whether nuclear power can contribute to climate action,鈥� the newspaper said. A country that exits the technology therefore needs to answer many unpleasant questions, for example why it prefers to invest in gas plants instead and still misses its climate targets even though solutions for achieving them exist.
