Posted on November, 01 2021

This would allow the greenwashing of billions of euros of financing for these activities, despite the high emissions from fossil gas and the radioactive waste produced by nuclear power. 

The taxonomy is an upcoming EU classification to give the financial sector clarity on which economic activities can be considered sustainable.

Henry Eviston, spokesman on sustainable finance at WWF European Policy Office, said:
“This proposal is a scientific disgrace that would deal a fatal blow to the taxonomy. It would severely damage the EU’s sustainable finance agenda and the EU Green Deal. It must be firmly rejected by the Commission and opposed by all Member States. With all eyes on COP26, the EU must show rock-solid climate leadership”.

Despite speculation on the role of France or other Member States, the exact source of the non-paper remains unclear.

Pierre Cannet, director of advocacy at WWF-France said: 
 "At COP26 today, President Macron again spoke of the need to limit global warming to 1.5°C. We know that to do so, we must end the use of fossil fuels - including fossil gas. We therefore assume that France does not support this taxonomy paper, which would be totally at odds with the President’s words, and we call on the French government to confirm this."
 
The criteria on gas outlined in the confidential non-paper are radically weaker even than a previous Commission proposal, which was withdrawn following a public outcry by scientists, financial institutions, and civil society. The non-paper criteria would allow many gas plants commissioned up to 2030 to be classified as ‘green’. These 'green' gas plants could start operations in 2035 or later, in complete contradiction with the International Energy Agency’s Net Zero scenario, which states that, in order to keep the global temperature rise to 1.5°C, there must be no investments in new fossil fuel projects and gas plants must be shut down by 2035 in industrialised countries [1].
 
The non-paper criteria on nuclear build on flawed technical recommendations by the Commission’s Joint Research Centre, which do not even require operational facilities for the long-term disposal of highly radioactive nuclear waste to be in place: having a ‘plan’ to develop such facilities is enough. The JRC report was criticised by several experts [2].
 
The proposed taxonomy criteria would be inconsistent with the Taxonomy Regulation [3]. They would split market stakeholders [4] and be weaker than existing market practice - the green bond market, for example, excludes both fossil gas and nuclear [5]. If the confidence of financial institutions is tarnished, many will not be willing to use a discredited taxonomy for their investment decisions or for retail funds [6]. 

Update 5/11: Our early analysis finds that, with such criteria, up to half of existing EU gas plants  
Contact:
Sarah Azau
Communications Manager, WWF European Policy Office
sazau@wwf.eu
Tel: +32 473 573 137

References:
[1] In the IEA Net Zero scenario, electricity generation must be 100% zero-emission in the OECD by 2035, and globally by 2040. This means a phase out of all oil and gas-fired power plants within the same timeframes (while coal-fired power has to be phased out sooner).
[2]  SCHEER, BASE, Heinrich Böll Stiftung.
[3] Article 19 of the Taxonomy Regulation requires the Technical Screening Criteria to be science-based and to apply the precautionary principle.
[4] On gas, hundreds of financial institutions in the Mark Carney-led Glasgow Financial Alliance for Net Zero would sacrifice their climate credibility if they followed taxonomy criteria such as these. On nuclear, 82% of German citizens do not consider that nuclear is sustainable and would reject green retail funds that include it. Indeed, around 75% of SPD and Green voters and 60% of CDU and Liberal voters said that a label which included nuclear power would not be credible.  Half of French citizens oppose the construction of new nuclear power plants, and the French government’s Greenfin label for green funds excludes both gas and nuclear energy.
[5] This practice is clarified, amongst others, by Electricité de France (EDF)’s own Green Bond Framework, issued in January 2020, which earmarks funds exclusively for: Construction of renewable power generation projects (nuclear is not included here); Investments in existing hydropower facilities; Investments in Energy Efficiency; Investments in biodiversity protection.
[6] See the concerns raised by the UN Principles for Responsible Investment (2021), How to save the scientific integrity of the EU’s green finance taxonomy. Available online.