The Platform on Sustainable Finance (PSF), which advises the European Commission on issues pertaining to the Taxonomy on sustainable activities, has ruled the Commission’s proposal to label nuclear energy and natural gas as sustainable as not in line with the legislative body’s own rules regarding the Taxonomy.

According to the PSF’s report on the issue published today, the European Commission’s apparent interpretation of the Taxonomy as being focused on the energy transition is incorrect.

Instead, “the focus of the Platform on Sustainable Finance, upon request from the European Commission, is on the environmental performance of economic activities.

This is also the purpose of the Taxonomy Regulation,” the advisory body noted in its report.

Amber category

While arguing new nuclear power plants should be excluded from the Taxonomy altogether, the platform suggests a CO2 intensity of 100 grammes per kWh for electricity generation as an upper limit for activities to be considered sustainable.

“Any criteria for GHG emissions above 100g CO2e/kWh on a life-cycle basis could use an alternative Taxonomy treatment such as an amber zone in any extended Taxonomy beyond green,” according to the PSF, which added it will publish a final proposal including one for an extended Taxonomy in the coming weeks.

The advisory body’s proposal for an amber category echoes an earlier idea from the Dutch Pension Federation, which in a written response to the PSF report called on the Commission to “seriously take into account” the platform’s advice.

The Pensioenfederatie also supported the PSF’s plea for strict criteria under which fossil energy projects could be considered sustainable or not.

“The Pensioenfederatie supports this approach as it can assist the financing of the energy transition, without diluting the widely understood concept of sustainable activities,” the federation said.

Ethos speaks against nuclear and gas in Taxonomy

Ethos Foundation has expressed its concern relating to the decision of the European Commission to list nuclear power and natural gas as sustainable activities in the Taxonomy.

In the current form the Taxonomy goes “against the original purpose” of steering investments towards activities with an impact on the environment, it said.

The Commission is set to adopt the Taxonomy in January following consultations with member states and the group of experts in the Platform on Sustainable Finance.

Ethos believes that including power plants running on natural gas and nuclear power plants in the Taxonomy would delay the energy transition process, lead to a misuse of public funds, subsidies, and private investments, and overall have a negative impact on climate, it said in a statement.

It is opposing the idea of natural gas and nuclear energy bridging the transition to renewables as in the plans of the EU Commission, based of the argument of the radioactive waste generated by nuclear power and greenhouse gases by natural gas.

Nuclear power, according to Ethos, is not in line with the “do no significant harm” principle currently included in the Taxonomy, it added.

Ethos will continue to exclude from the pool of investments companies generating more than 5% of their turnover through activities in the nuclear and gas sectors, according to its principles for socially responsible investments, and regardless of the decision of the Commission.

Read the digital edition of IPE’s latest magazine.