Commentary. In the latest draft of the EU Commission on sustainability criteria, natural gas, nuclear power and deforestation are cleared for financing.

The fossil fuel lobby has found its way into Europe’s ‘Green New Deal’

In a press conference last week, Sebastien Godinot, economist and head of WWF Europe and representative of numerous NGOs and environmental associations, expressed very harsh judgement of the draft of the Taxonomy Delegated Act circulated in Brussels. With him were Andreas Hoepner, Full Professor of Operational, Banking and Financial Risk at University College Dublin and Ariel Brunner, Head of Europe and Central Asia at BirdLife International. All three are members of the EU Platform on Sustainable Finance.

“A pure greenwashing operation,” Godinot said. “Which risks undermining the climate leadership of the European Union globally and discrediting President von der Leyen. This proposal on the taxonomy of sustainable economic activities has nothing to do with the objectives of the Green Deal, is not aligned with the Paris climate agreement, and has no scientific basis. As it is formulated, it allows only a few people to make a lot of money.”

The taxonomy of the European Union will become the system for classifying which activities can be considered sustainable in terms of climate, which can be financed or incentivized as such and for what green bonds can be issued. When Europe asks us to spend 30% of the Next Generation EU on climate activities (for Italy there are about 80 billion), we will have to refer to the EU taxonomy to calculate which actions fall within this category.

The shock of various associations, expressed in a letter signed by 226 scientists and managers of various organizations, derives from the fact that in the latest version of the provision, gas and nuclear power have also appeared among the “sustainable” sectors. These were not in the version introduced a few months ago, developed after about three years of consultations between experts. As formulated, the 226 write, it contains “groundless claims that are contrary to climate science. The EU taxonomy for sustainable finance was conceived as a scientific benchmark for avoiding greenwashing. With this proposal it becomes a greenwashing tool.”

By legitimizing gas, it also makes acceptable the hydrogen produced with the gas and the CCS process (carbon capture and storage), what is known as gray or blue hydrogen, which has nothing to do with green hydrogen produced by electrolysis with renewable electricity.

“It is a total surrender to the gas lobby, all the more dangerous because, at a time when other countries in the world are developing their competing systems for classifying sustainable investments, lowering European ambition means creating a process that risks to drag all the others down,” the letter concludes.

According to Andreas Hoepner — the only science representative in the 32-person commission that contributed to drafting the contested document — making a taxonomy “is an exercise in labeling certain activities. It is not like a political decision that can be more or less right. This is simply false.”

Therefore, even financing a nuclear power plant is listed among sustainable activities. The support for this statement is contained in a document prepared by the JRC (Joint Research Center), the scientific voice which constitutes one of the Directorates General (DG) of the European Commission. The document says nuclear power is comparable to hydroelectricity. If the radioactive effects are not taken into account it is inconceivable, Godinot said. However it turns out, this taxonomy will not save nuclear power.

Standard & Poor’s has already said that it is not competitive; from an economic point of view it makes no sense. Yet in the commission there are those who, like Thierry Breton, defend nuclear power and say they are proud of it.

“I believe that Germany will never accept this position in the forest management sector. The work of the lobbies of the Northern European countries gives carte blanche to those who have an interest in indiscriminate exploitation of forests,” denounced Ariel Brunner of Bird-Life International.

“Every type of deforestation is accepted as sustainable; any plot of less than 25 hectares, which is double the average size of European properties, is excluded from the climate benefit analysis; the use of fertilizers is allowed; forest management techniques allowed are national ones, which means that no good practices are introduced, but everything remains as it is; any certification system is accepted, while the FSC is not even mentioned. Simply unacceptable.”

The Commission will have time to rethink this draft until April 21. Then the European Parliament and the Council will approve it or return to sender.

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