Europe Plans To Label Some Natural Gas and Nuclear Investments as ‘Green’
The European Commission is expected to allow investments flowing into natural gas and nuclear energy projects to be considered as “green” investments, assuming certain criteria are met. Germany and France, however, differ in their approaches to renewables. While Germany has abandoned nuclear power in favor of natural gas, France continues to rely on nuclear.
The European Commission is expected to categorize investment into natural gas and nuclear energy projects as “green” as it plans to issue new rules for investment into sustainable energy initiatives.
With new criteria in place, the EU aims to stop companies from overstating the environmental friendliness of projects to attract money tagged for green energy initiatives, so called “greenwashing.”
As Europe experiences a winter beset with energy shortages and record high electricity prices, European governments are about to close a year’s worth of negotiations over green energy investment standards that will shape the EU’s energy transition in the near term.
Including both nuclear power and natural gas in the list of eligible green energy investments is critical to satisfying the domestic agendas of the EU’s two largest economies, Germany and France, which have been at odds over which transition fuel is preferable.
Germany favors natural gas as Berlin focuses on shutting down its nuclear power industry by the end of 2022, a goal it set in the wake of Japan’s Fukishima reactor disaster in 2011.
Berlin rang in the new year by closing three of its last six nuclear power plants, and the remaining three are set to close by the end of the year. In 2021, the six plants accounted for 12% of electrical power generation in Germany, according to the German Association of Energy and water Industries (BDEW.)
Renewable energy accounted for 41% of Germany’s energy mix in 2021 (down 4% from 2020 because of variations in weather patterns), with coal producing about 28% and gas contributing 15%, according to BDEW preliminary data.
Germany has said it intends to phase out coal as well by 2030 and to satisfy 80% of its power needs with renewables, mostly by expanding facilities that produce wind and solar power.
This is where gas, however, will play a role to ensure security of supply when the weather fails to provide.
Germany’s largest electrical producer, RWE, will build more gas plants; RWE CEO Markus Krebber told the German weekly news magazine WirtschaftsWoche last autumn that the country needs to build 20–30 GW of new gas-fired power plant capacity to fully transition from nuclear and coal power.
RWE had run the Brokdorf, Grohnde, and Gundremmingen C nuclear plants (the three plans closed in December) together with Europe’s largest energy network operator, E.ON.
In contrast, French President Emmanuel Macron has put nuclear power at the center of his country’s energy transition. In announcing his “France 2030” reindustrialization plan in October, Macron promised to invest in a program to demonstrate small-reactor technology during this decade as well as mass produce hydrogen using nuclear electricity.
The split between Germany and France seems to have divided the continent as well with support for Berlin coming from, among others, Austria, Luxembourg, and Belgium, which plans to close its nuclear power plants by 2025.
France is Europe’s largest producer of nuclear energy and relies on nuclear to supply 70% of its electricity. Other large EU consumers of nuclear power such as Finland and the Czech Republic support Macron’s position and view nuclear power as an alternative to coal, which is widely used in eastern Europe where Poland, Hungary, Bulgaria and Romania also seek investment in a nuclear transition.
A draft of the proposed criteria currently being circulated for comment would, among other things, require nuclear projects to receive construction permits by 2045 and to have plans to safely dispose of radioactive waste.
To be certified as “green,” gas-fueled power plants would need to keep emissions below 270 g of CO2 equivalent per kilowatt-hour. They would need to replace a more carbon-intensive fossil fuel plant and receive a construction permit by 31 December 2030.