The European Commission is expected to publish its “sustainable finance taxonomy”, a set of long-anticipated rules on which businesses can attract climate-friendly investments in January 2022.
The European Commission is expected to publish its “sustainable finance taxonomy”, a set of long-anticipated rules on which businesses can attract climate-friendly investments in January 2022. Discussions between member states and the EU have been circling majorly around whether nuclear energy and natural gas will be identified as climate-friendly investments.
EU Environment Commissioner Virginijus Sinkevicius told a news conference: “We are going to have most likely a discussion tomorrow in college, which then will lead… to approval next year” referring to the Commission’s weekly meeting. The Commission is required to share its proposal with member states and its group of expert advisers from finance, industry and civil society groups before it can publish them. The consultation process will likely begin this month.
Disagreements among member states on whether natural gas and nuclear states should be included or not have delayed the taxonomy, which was scheduled to be adopted this year. Some countries say gas investments are needed to help them quit more-polluting coal and others warn labelling a fossil fuel as green would undermine the credibility of the rules and the EU’s leadership in tackling climate change.
Nuclear energy is similarly divisive. France, the Czech Republic and Poland are among those saying the fuel’s low CO2 emissions make it vital in the transition to green energy. Germany, Luxembourg and Austria are among those opposed, citing concerns around radioactive waste.
The EU taxonomy will not ban investments in activities not labelled “green”. But by limiting the green label to those activities deemed truly climate-friendly, the EU aims to steer cash into low carbon projects and stop companies or investors from making unsubstantiated environmental claims.
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