‘World is watching’, as MEPs vote on green finance rules

Political pressure is mounting on the European Parliament to reject the inclusion of nuclear and natural gas in the EU sustainable finance plan, as Ukrainian activists and political leaders warn it would only benefit Russia and deepen Europe’s reliance on fossil fuels.

The proposal, first pushed by Germany and France, will be voted by MEPs on Wednesday (6 July) — with tight results likely.

A cross-party alliance of MEPs from the environment and economy committees managed last month to pass a text objecting to the classification of certain gas and nuclear energy projects as green investments until 2030, under the so-called EU taxonomy.

But at least 353 EU lawmakers (out of a total of 705 MEPs) must now support the objection to kill the proposal and oblige the European Commission to rewrite it.

“The world is watching us,” green Dutch MEP Bas Eickhout warned ahead of a key debate, arguing that labelling gas as ‘green’ would delay climate action worldwide and undermine the 2015 Paris Agreement.

However, according to the EU commissioner for financial services Mairead McGuinness, the taxonomy is a “realistic and pragmatic” proposal given concerns over energy security of supply in some member states.

The majority of green, socialist, and left-wing lawmakers are expected to vote against the inclusion of nuclear and gas in the taxonomy, while the centre-right European People’s Party (EPP), the largest group in the European Parliament with 177 MEPs, appears to be divided.

Yet, centre-right MEP Christophe Hansen said on Tuesday that the support for the objection within his political group is growing.

The liberals, for their part, will support the commission proposal, although some national delegations have already voiced their opposition. Conservatives strongly oppose the objection.

‘New geopolitical reality’

The proposal to label nuclear and gas as transitional ‘green’ activities was unveiled on New Year’s Eve 2021, prompting a backlash against the commission for putting forward a very controversial proposal when nobody was looking.

In addition to its climate impacts, the war in Ukraine, Russia’s blackmailing of gas supplies and Europe’s plans to wean itself off Russian fossil fuels have triggered renewed calls to reconsider the proposal.

“Russian gas cannot be part of the solution to the problems the EU is trying to tackle with this taxonomy,” Ukrainian MP Inna Sovsun told a press conference on Tuesday, urging EU lawmakers to reject the green label for nuclear and gas.

The current proposal, she said, does not take into account Russia’s war against Ukraine and “the new geopolitical reality” that it creates.

“The EU cannot be supporting Ukraine and at the same time continue building an economy based on easy access to cheap Russian gas,” Sovsun also said, pointing out that the 27-bloc spent nearly €1bn on Russian energy supplies per day.

Other voices against the inclusion of gas and nuclear in the EU taxonomy include the Ukrainian ambassador to Germany, Andrij Melnyk, Ukrainian scientist Svitlana Krakovska, civil society leaders and influential celebrities.

Opposition has also been raised by environmental groups — with climate activists gathering in Strasbourg on Tuesday to protest against the taxonomy.

“MEPs have an appointment with history, and they better not miss it,” Sebastien Godinot, economist and campaigner at WWF, said referring to Wednesday’s vote.

‘Greenwashing’ tool

The taxonomy was designed to help finance the much-needed transition away from fossil fuels and steer investments away from companies and investors which falsely claim to be environmentally sustainable.

But critics say the current proposal undermines the credibility of the EU taxonomy as a science-based investment tool, gives credence to claims of greenwashing, creates confusion in financial markets, and puts the bloc’s green leadership internationally at risk.

“MEPs need to object to the classification of fossil gas and nuclear activities as environmentally sustainable — an evident example of greenwashing,” said environmental lawyer Marta Toporek from ClientEarth.

Centre-right MEP Peter Liese, for his part, said that one clear reason to reject the taxonomy is that it does not include liquified natural gas (LNG) infrastructure.

The taxonomy adoption would be “to the benefit of Russia” and “a bad signal for the people suffering from the war in Ukraine,” he tweeted on Tuesday,

France’s win

EU member states were already split over the role of gas and nuclear in the energy transition and, thus, in green finance — with Austria and Luxembourg as their most vocal opponents.

France, which generates the majority of its power from nuclear power and builds and operates nuclear power plants, has been pushing for the inclusion of nuclear power in the taxonomy thanks to a coalition with pro-gas southern and eastern Europe governments.

But some MEPs have argued that the current taxonomy will only benefit some countries in the EU.

“This [delegated] act takes green funding away from the countries which need it the most and puts it in the pocket of [French president Emmanuel] Macron,” said socialist MEP Paul Tang.

Tang was referring to France as the only country which could fulfil the taxonomy conditions for long-term nuclear waste storage by 2045.

Likewise, Eickhout said that labelling nuclear as green under the taxonomy is “a pure political game played by France,” with criteria written by France and for France.

Additionally, MEPs slammed the commission for backsliding the parliament’s influence, deploring the lack of public consultation over the inclusion of gas and nuclear in the taxonomy.

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