Intense industrialization and urbanization can be found around the world today. The increased consumption of natural resources, especially coal, has not only has a huge impact on ecosystems but also brings severe weather events that affect our lives. To mitigate the environmental issues happening, the European Union has also developed a uniform climate law to meet its two climate goals: emission targets for 2030 and 2050. They are aiming to reduce carbon dioxide emissions by 55% of 1990 levels by 2030 and a net-zero emission by 2050.
On December 31st, 2021, European Commission drafted its green energy taxonomy and proposed that nuclear and natural gas projects could count as “green” investments under certain conditions. However, many concerns and controversial ideas were raised by environmental activists and different stakeholders, especially investors.
Environmentalists are confused because even though the use of nuclear energy does not emit greenhouse gases, it does carry other environmental risks. Nuclear energy involves uranium mining for use in reactors. The radioactive nuclear wastes generated from the extraction process not only contaminate the environment and cause a huge impact on the ecosystem but also affect human health in the long term. For investors, they fear the risks of greenwashing. Greenwashing can easily mislead market participants and does not give companies that are working to green their products and activities the advantages they deserve, and ultimately lead to a decline in the green economy.
Robert Habeck, leader of the ‘German Green Party’, responded on EU’s proposal on January 25th, 2022,”which in my view contradicts the very idea of the taxonomy by designating gas and nuclear as eligible for financial markets…would not have been necessary.” He also stated,” If nuclear energy stays in the taxonomy as proposed, Germany should vote no.”
Yet, on February 2nd, 2022, the European Commission announced amendments to their draft green labelling standards. They proposed that disclosure rules would be established to ensure greater transparency for the stakeholders and investors. But still, not all countries agreed with the proposals. While France, the Czech Republic and other Eastern European countries, which want to revive their nuclear industries, welcomed the initiative, Germany, Denmark and the Netherlands opposed it. They decided to shut down all nuclear power plants after the Fukushima disaster in 2011, Germany is hoping to develop and invest in wind and solar power instead.
“It’s a huge waste of time and a defeat for Europe,” Anna Deparnay-Grunenberg, member of ‘The Greens/EFA in the European Parliament’, mentioned. She raised that the proposal is a waste of time and money, since ecologically, natural gas and nuclear are not green energy. “Every euro put into natural gas and nuclear power prevents us from taking the big steps towards a truly renewable world. It is much faster and more ecological to invest directly in 100% renewables.”
In the face of political pressure under this contentious issue, the European Commission has offered a compromise, arguing that the green label will be temporary, as gas and nuclear power can only act as “transitional energy” today.