Social Europe

politics, economy and employment & labour

  • Themes
    • Strategic autonomy
    • War in Ukraine
    • European digital sphere
    • Recovery and resilience
  • Publications
    • Books
    • Dossiers
    • Occasional Papers
    • Research Essays
    • Brexit Paper Series
  • Podcast
  • Videos
  • Newsletter

EU cash floodgates open for nuclear and gas

Barbara Mariani 25th January 2022

There is no environmental, climate or economic reason to include nuclear and fossil gas in the EU investment taxonomy.

taxonomy,gas,nuclear
Sunset, not dawn—a gas-turbine power plant (Bannafarsai_Stock / shutterstock.com)

At the turn of the year a European Commission proposal was leaked which would label two polluting energy sources, nuclear and fossil gas, as ‘environmentally sustainable’ in the European Union’s investments ‘taxonomy’. This despite two years of high rhetoric on climate and decarbonisation since the adoption of the European Green Deal and the commitment to make Europe the first carbon-neutral continent by 2050.

The proposed Complementary Delegated Act to the EU Taxonomy for climate mitigation would classify certain gas and nuclear activities as green investments, on the grounds that these are ‘transitional’ energies which might support the changeover from the most CO2-intensive energy source (coal) to renewables. The document envisages a construction-permits deadline for application of the green label, of 2030 for gas-fired power plants and 2045 for nuclear.

Any new investment in fossil-gas and nuclear-power infrastructure is however far from temporary or harmless. Further gas plants will tie the EU’s economy to highly carbon-intensive fossil fuels, with their climate impacts, for decades. As for nuclear energy, we need to broaden the panorama to the whole life-cycle of power generation, from the mining of the uranium to radioactive-waste disposal—not to mention leaks and possible accidents.

Despite lobbyists’ efforts to portray gas and nuclear as a ‘low-impact’ transitional solution, it is obvious both technologies raise serious environmental concerns and will delay the transition to a clean energy system and make it more costly for EU citizens. More importantly, if nuclear and gas are deemed green in the EU taxonomy, hundreds of millions of euro necessary for the energy transition will be diverted from much-needed solutions—energy-efficiency measures, buildings renovation, renewables and heat pumps—to fossil-fuel infrastructure and everlasting nuclear waste.


Our job is keeping you informed!


Subscribe to our free newsletter and stay up to date with the latest Social Europe content. We will never send you spam and you can unsubscribe anytime.

Sign up here

Necessary step?

Over the past three years, some member states, strongly pushed by the gas industrial lobby, have embraced the narrative of fossil gas as a necessary intermediate step towards compliance with EU climate ambition, prior to the introduction of renewables on a larger scale. These member states have a clear element in common—their significant dependence on coal to power their economies. They argue that gas is needed to replace coal, as a bridge or backup source to the uptake of renewables (mostly wind and solar).

The European Environmental Bureau’s energy scenario for compatibility with the Paris Agreement has however shown that a direct switch from coal-based power to large-scale renewables is technically feasible and the only way to try to limit global temperature rise to 1.5C above pre-industrial levels by the middle of this century.

A further argument made by proponents of gas as a transitional source is that it is associated with lower greenhouse-gas emissions than coal. But this plant-by-plant comparison overlooks methane leaks during the gas supply chain. Methane matters because its impact on climate change is 84 times greater than CO2 and if leaks total more than 3 per cent of gas content gas-fired power generation may be even worse for the climate than coal.

The economic argument does not hold either. In its recent report Net Zero by 2050: a Roadmap for the Energy Sector, the International Energy Agency shows that renewables are already the most competitive energy source in the EU—considering again all the building, maintenance and generation costs of a power plant—and that their comparative advantage vis-à-vis fossil-fuel-based counterparts will only increase in the coming decades. The same investments in efficiency and renewables will deliver decarbonisation earlier and more cost-effectively, while doing no harm or at least less harm than investing in gas and nuclear.

There is also a geopolitical cost arising from increasing EU dependence on gas. In the context of soaring energy bills, further investing in gas will only result in greater dependence on fossil fuel imported from non-EU countries—with Russia at the forefront—whose price has proved extraordinarily volatile amid global speculation and political shocks.

Large risks

The defenders of nuclear power argue it provides a stable energy supply which does not generate CO2. If we however take into account the large risks associated with the operation and maintenance of reactors and the unsolved issue of radioactive waste—with its management challenges and associated costs for future generations—nuclear power cannot, by any stretch of the imagination, be considered a sustainable investment. Through its vice-president Frans Timmermans, responsible for the European Green Deal, the commission has itself publicly recognised that nuclear cannot be classed as green.

Worldwide, not a single technology-neutral tender has been won by nuclear energy. Most have been won by renewable alternatives, which have proved much cheaper.

In supporting nuclear power as a transitional source, the commission keeps applying de facto a perverse logic: instead of steering available resources into energy-saving investments and/or non-polluting energy sources, it allows finance to be consumed paying for the costs of pollution (nuclear decommissioning and radioactive-waste management). EU taxpayers will have to foot the bill—as they already do in many member states which rely on nuclear power or are in the process of decommissioning old plants. Taxpayers’ money could therefore end up being diverted from truly sustainable solutions towards non-cost-effective measures which create additional risks and responsibilities.


We need your support


Social Europe is an independent publisher and we believe in freely available content. For this model to be sustainable, however, we depend on the solidarity of our readers. Become a Social Europe member for less than 5 Euro per month and help us produce more articles, podcasts and videos. Thank you very much for your support!

Become a Social Europe Member

‘Greenwashing’ precedent

With the inclusion of nuclear and gas as environmentally sustainable investments, the commission would set a very dangerous ‘greenwashing’ precedent, threatening the very purpose of its sustainable-finance agenda and its Green Deal.

The taxonomy was promised to be a tool to help investors recognise and label environmentally sustainable economic activities, promote a transition to a zero-carbon future and guide funding towards the solutions society needs. If gas and nuclear are however included, investors will not be able to rely on a common, robust and science-based classification of sustainable economic activities, diluting the main goal of the regulation and its contribution to delivering the Green Deal.

In a domino effect this could jeopardise the commitment by the European Investment Bank to stop investing in gas. It would also facilitate state-aid decisions and regulatory approaches supporting national investment in nuclear and gas, and potentially affect EU funding and priorities.

Secondary legislation

The commission is proposing this legal act as secondary legislation. This is not the regular co-decision process, empowering the Council of the EU and the European Parliament to amend the legislative proposal until a final political agreement is reached (which may take two or three years).

Secondary legislation generally applies only to technical regulations. The two other EU institutions can then only approve or reject the proposal ‘as a whole’, within a very short timeframe. To reject the commission’s decision, the parliament would need to assemble a contrary majority in four months.

A decision with such potential long-term environmental, economic, financial and social impacts should be open to a fully-fledged democratic process, whereby EU citizens are well-informed and can express their views. Without such democratic scrutiny, the commission would send a very bad political signal, representing a big blow to the credibility of the European Green Deal and the European institutions themselves.

Barbara Mariani
Barbara Mariani

Barbara Mariani is policy manager for climate at the European Environmental Bureau. She has been working for 20 years on EU climate, energy and environmental policy for various stakeholders, including government and industry.

You are here: Home / Ecology / EU cash floodgates open for nuclear and gas

Most Popular Posts

European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
Visentini,ITUC,Qatar,Fight Impunity,50,000 Visentini, ‘Fight Impunity’, the ITUC and QatarFrank Hoffer
Russian soldiers' mothers,war,Ukraine The Ukraine war and Russian soldiers’ mothersJennifer Mathers and Natasha Danilova
IGU,documents,International Gas Union,lobby,lobbying,sustainable finance taxonomy,green gas,EU,COP ‘Gaslighting’ Europe on fossil fuelsFaye Holder
Schengen,Fortress Europe,Romania,Bulgaria Romania and Bulgaria stuck in EU’s second tierMagdalena Ulceluse

Most Recent Posts

EU social agenda,social investment,social protection EU social agenda beyond 2024—no time to wasteFrank Vandenbroucke
pension reform,Germany,Lindner Pension reform in Germany—a market solution?Fabian Mushövel and Nicholas Barr
European civil war,iron curtain,NATO,Ukraine,Gorbachev The new European civil warGuido Montani
artists,cultural workers Europe’s stars must shine for artists and creativesIsabelle Van de Gejuchte
transition,deindustrialisation,degradation,environment Europe’s industry and the ecological transitionCharlotte Bez and Lorenzo Feltrin

Other Social Europe Publications

front cover scaled Towards a social-democratic century?
Cover e1655225066994 National recovery and resilience plans
Untitled design The transatlantic relationship
Women Corona e1631700896969 500 Women and the coronavirus crisis
sere12 1 RE No. 12: Why No Economic Democracy in Sweden?

ILO advertisement

Global Wage Report 2022-23: The impact of inflation and COVID-19 on wages and purchasing power

The International Labour Organization's Global Wage Report is a key reference on wages and wage inequality for the academic community and policy-makers around the world.

This eighth edition of the report, The Impact of inflation and COVID-19 on wages and purchasing power, examines the evolution of real wages, giving a unique picture of wage trends globally and by region. The report includes evidence on how wages have evolved through the COVID-19 crisis as well as how the current inflationary context is biting into real wage growth in most regions of the world. The report shows that for the first time in the 21st century real wage growth has fallen to negative values while, at the same time, the gap between real productivity growth and real wage growth continues to widen.

The report analysis the evolution of the real total wage bill from 2019 to 2022 to show how its different components—employment, nominal wages and inflation—have changed during the COVID-19 crisis and, more recently, during the cost-of-living crisis. The decomposition of the total wage bill, and its evolution, is shown for all wage employees and distinguishes between women and men. The report also looks at changes in wage inequality and the gender pay gap to reveal how COVID-19 may have contributed to increasing income inequality in different regions of the world. Together, the empirical evidence in the report becomes the backbone of a policy discussion that could play a key role in a human-centred recovery from the different ongoing crises.


DOWNLOAD HERE

ETUI advertisement

Social policy in the European Union: state of play 2022

Since 2000, the annual Bilan social volume has been analysing the state of play of social policy in the European Union during the preceding year, the better to forecast developments in the new one. Co-produced by the European Social Observatory (OSE) and the European Trade Union Institute (ETUI), the new edition is no exception. In the context of multiple crises, the authors find that social policies gained in ambition in 2022. At the same time, the new EU economic framework, expected for 2023, should be made compatible with achieving the EU’s social and ‘green’ objectives. Finally, they raise the question whether the EU Social Imbalances Procedure and Open Strategic Autonomy paradigm could provide windows of opportunity to sustain the EU’s social ambition in the long run.


DOWNLOAD HERE

Eurofound advertisement

Eurofound webinar: Making telework work for everyone

Since 2020 more European workers and managers have enjoyed greater flexibility and autonomy in work and are reporting their preference for hybrid working. Also driven by technological developments and structural changes in employment, organisations are now integrating telework more permanently into their workplace.

To reflect on these shifts, on 6 December Eurofound researchers Oscar Vargas and John Hurley explored the challenges and opportunities of the surge in telework, as well as the overall growth of telework and teleworkable jobs in the EU and what this means for workers, managers, companies and policymakers.


WATCH THE WEBINAR HERE

Foundation for European Progressive Studies Advertisement

Discover the new FEPS Progressive Yearbook and what 2023 has in store for us!

The Progressive Yearbook focuses on transversal European issues that have left a mark on 2022, delivering insightful future-oriented analysis for the new year. It counts on renowned authors' contributions, including academics, politicians and analysts. This fourth edition is published in a time of war and, therefore, it mostly looks at the conflict itself, the actors involved and the implications for Europe.


DOWNLOAD HERE

Hans Böckler Stiftung Advertisement

The macroeconomic effects of re-applying the EU fiscal rules

Against the background of the European Commission's reform plans for the Stability and Growth Pact (SGP), this policy brief uses the macroeconometric multi-country model NiGEM to simulate the macroeconomic implications of the most relevant reform options from 2024 onwards. Next to a return to the existing and unreformed rules, the most prominent options include an expenditure rule linked to a debt anchor.

Our results for the euro area and its four biggest economies—France, Italy, Germany and Spain—indicate that returning to the rules of the SGP would lead to severe cuts in public spending, particularly if the SGP rules were interpreted as in the past. A more flexible interpretation would only somewhat ease the fiscal-adjustment burden. An expenditure rule along the lines of the European Fiscal Board would, however, not necessarily alleviate that burden in and of itself.

Our simulations show great care must be taken to specify the expenditure rule, such that fiscal consolidation is achieved in a growth-friendly way. Raising the debt ceiling to 90 per cent of gross domestic product and applying less demanding fiscal adjustments, as proposed by the IMK, would go a long way.


DOWNLOAD HERE

About Social Europe

Our Mission

Article Submission

Membership

Advertisements

Legal Disclosure

Privacy Policy

Copyright

Social Europe ISSN 2628-7641

Social Europe Archives

Search Social Europe

Themes Archive

Politics Archive

Economy Archive

Society Archive

Ecology Archive

Follow us

RSS Feed

Follow us on Facebook

Follow us on Twitter

Follow us on LinkedIn

Follow us on YouTube