Who pushes and who brakes in Europe on nuclear power. Report Ft

Brussels will delay long-awaited proposals on how to classify nuclear energy and natural gas in the EU's reference labeling system for green finance, as member states require more flexible rules to help tackle the continent's energy crisis. The Financial Times writes.

European Commissioner for Financial Services Mairead McGuinness told the Financial Times that it will take Brussels longer to decide how to deal with controversial energy sources under the so-called "sustainable finance taxonomy" scheduled for this fall.

The debate over how to classify low-carbon natural gas and nuclear power, which does not produce CO2 but whose waste by-products are toxic to the environment, has been supercharged by rising electricity costs that prompted EU governments to emergency financial actions to protect families.

European leaders are expected to discuss taxonomy and how to mitigate the price hike at a summit in Brussels on Thursday.

"As we get to the end of the year there will be more pressure to resolve this," McGuinness said. “We don't have a ready solution because this is, both technically and politically… one of those issues where there are very divided opinions”.

The pro-nuclear European countries, led by France, and the pro-gas member states in the south and east, demand that taxonomy rules not penalize technologies they say are vital to ensure the transition to net zero emissions.

Environmental groups, however, want the system to stick to scientific criteria to ensure that the rules eliminate, rather than encourage, so-called "greenwashing" in the investment sector.

McGuinness said it is "still the target" of proposing the rules by the end of the year. "But who knows what the twists will be," he added, referring to elections in EU countries and government formations that have yet to be established. France holds presidential elections next April, while three parties in Germany are in coalition talks. The taxonomy proposal will have to win the support of member states and MEPs.

“We are hearing citizens and businesses talking about higher energy costs and keeping the lights on. We need to make sure we don't create fears that this transition is a problem, because transition is the solution, ”he said.

The European energy crisis is the latest challenge to the credibility of the EU green labeling scheme which was designed to be a "gold standard" for investors to know what counts as truly sustainable economic activity.

But the rules have been mired in controversy, as Brussels struggles to balance science with delicate political decisions about whether to give some businesses the highest green label, penalizing those that aren't.

Ten countries, including France, Finland, Poland and Hungary this week said it is "absolutely necessary that nuclear energy be included in the taxonomy framework."

McGuinness said it remains an "open question" whether the green label will be expanded to "accommodate nuclear and gas." He said possible trade-offs include creating an "amber" label for businesses that have not been awarded the green label but would still secure a place in the bloc transition and would not discourage private sector investment.

The commission is also exploring how to redefine so-called transitional activities that have a lower environmental impact to prevent the taxonomy from becoming "too binary," McGuinness said.

“If all the money flows into green [businesses] today, there will be tons of money that won't have a realm to go to. We will have made zero difference in our movement towards climate neutrality ”.

The taxonomy has become a first litmus test of the EU's ambitious climate goals, which call for the blockade to reduce average carbon emissions by 55 percent in 2030 (compared to 1990 levels).

The rules are closely watched by investors and regulators in the US and UK, who have also said they want to create their own rating systems. Within the EU, the taxonomy will be used to judge whether the investments made by member states are truly green and will form the basis for an EU "standard green bond" that will be used to issue 250 billion euros of sustainable debt in the EU. scope of the block recovery fund.

(Extract from the foreign press review by Epr Comunicazione)