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EU finance: rigged against the planet?

'Fake Green Taxonomy Act' must be rejected by EU Parliament, says WWF
Katie Hill - Editor-in-Chief, My Green Pod
A heap of euro coins on the dry ground

The European Commission has bowed to pressure from France and others by publishing a set of sustainable finance rules which will do huge damage to the EU and global environmental action.

The Commission officially classifies fossil gas and nuclear power as environmentally sustainable under the EU Taxonomy – the EU’s ‘green’ investment guidebook.

This is despite the fact that fossil gas generates huge emissions and nuclear power creates highly radioactive waste which we still do not know how to handle. 

A dangerous benchmark

The ‘Taxonomy’ creates a benchmark that lags behind the existing green bond market, which excludes gas and nuclear, and risks directing billions of euros towards these harmful industries.

The European Commission’s scientific advisers on the Taxonomy slammed the Commission’s proposal, saying that it was ‘not in line with the Taxonomy Regulation’ and posed a ‘serious risk of undermining the sustainable Taxonomy framework’.

‘The huge pressure by some European governments’ pet industries has led to this proposal. The Act adopted by the Commission today would rig Europe’s financial system against the planet. They must think again and keep gas and nuclear out of the Taxonomy.’

Director of WWF European Policy Office

‘A political stitch-up’

The Commission’s proposal is meant to flesh out the details of the robust EU Taxonomy regulation, whose Article 19 requires that the Taxonomy criteria should be built on science, should not give special treatment to certain technologies and should be easily verifiable.

However, the new gas and nuclear criteria violate each of these requirements, and are therefore inconsistent with the regulation. WWF has called on the EU Parliament and Council, which each have a yes/no vote on the proposal, to reject it.

‘In a disgraceful process, the European Commission has engaged in a political stitch-up with Europe’s governments. The final gas and nuclear criteria are even worse than in the draft, which was slammed by the EU Platform.

‘By setting the bar lower than the existing green bond market, the EU is losing its green finance leadership and sending a totally counterproductive signal globally. Politically, the European Parliament has been treated as a second-class institution. It cannot just rubber-stamp this decision by European governments: it must reject this act.’

Sustainable finance policy officer at WWF European Policy Office

Support for gas and nuclear

France has been pushing for months to have nuclear power included as sustainable in the EU Taxonomy.

In exchange for the support of Poland, Hungary, the Czech Republic, Slovakia and more on nuclear energy, the French government agreed to proactively support a scientifically baseless inclusion of fossil gas. Germany supports the inclusion of gas but opposes nuclear.

On the side of scientific evidence stood Spain, which opposed the inclusion of both gas and nuclear, while a group of Member States like Austria, Denmark, Luxembourg and Portugal oppose nuclear.

The Austrian government has promised to present a legal challenge to any Act that contains nuclear power.

‘The European Commission has allowed European governments to drag this Taxonomy Act into the gutter – and this fiasco is going to create a huge mess in financial markets. Scientifically speaking this Act is a fraud, which must be rejected to protect the credibility of the whole EU Taxonomy.

‘No right-minded financial institution should use this Act to make its green finance decisions, since they would still be exposing themselves to the risks of greenwashing, reputational damage, stranded assets, lock-in, and legal complications.’

Senior economist at WWF European Policy Office

While some Member States were involved in drafting the proposal, the European Parliament – and citizens – were completely excluded from the process.

Many investors and banks have already made it clear they do not support a greenwashed taxonomy – a system that was explicitly designed to identify green economic activities in a clear and transparent manner for investors.

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