The European Union (EU) announced on December 16 that it has reached an agreement among its member states on rules concerning the financing of green energy projects. After reaching a consensus on whether nuclear and natural gas should be included, lawmakers approved a list of technologies and activities that could be classified as green. The so-called “green deal” is the first project implemented by European Commission President Ursula von der Leyen, who took office on Dec, 1. On the Paris Agreement from 2015, the new legislation aims to make the EU climate neutral by 2050 and is in line with the EU’s political position.
France has led a group of nuclear energy supporters seeking to revise an earlier version of the financing rules, which was released on December 11th, excluding nuclear power and natural gas from technologies that qualify for the investment plan. The European Parliament and member states have argued to recognize nuclear and natural gas as transitional energy sources. France, UK and Eastern European countries, the Czech Republic, Hungary, Poland, Slovakia, Romania, Bulgaria and Slovenia rejected the nuclear and natural gas exclusion agreements proposed earlier last week.
The achievement of the 2050 target is to be completed next summer ahead of a planned bilateral meeting between the EU and China and the COP26 Summit in Glasgow Scotland next fall. The new agreement helps push the EU to translate environmental goals into standards for bank managers and insurers by defining what is considered green activity and what is not. The EU wants to regulate the green energy investment market in order to channel money into the regional economy.
Pascal Cafin, Member of the Parliament of France, said that the final version of the agreement means that both natural gas and nuclear energy are not included and are not, in principle, excluded from the parts of the so-called taxonomy list, which in fact include EU definitions of sustainable measures for investment purposes. He noted that nuclear and gas could be included if they, along with other activities on the list, comply with the principle of no material harm.
The proposal agreed to late Monday, after final revisions were made earlier in the day includes an emphasis on boosting economic competitiveness of member states and ensuring an equitable transition to cleaner energy across the EU. The deal’s tenets include environmental protection and biodiversity, strategic development of sustainable food policy, and a plan for action toward a circular economy that promotes recycling and the use of recycled materials. It promotes decarbonization in power generation along with transportation and agriculture.
Following earlier final revisions, proposals agreed late Monday include an emphasis on improving the economic competitiveness of member states and ensuring a fair transition to clean energy in the EU. The principles of the agreement include environmental protection and biodiversity, strategic development of sustainable food policies, and a circular economy action plan to promote the processing and use of recyclables. It promotes decarbonization in transportation, agriculture and power generation. Transport prices should reflect their impact on the environment and health, and when considering the EU Energy Tax Directive, consideration will be given to the abolition of tax benefits for aviation and marine fuel. The European Commission is the executive body of the European Union and it will use the list of activities contained in the financing agreement, which determines the general framework of the investment policy. Banks and other financial institutions will need to detail how their products fit the taxonomy list.
Investors in Europe and around the world see the taxonomy as a major reform of investment practices and are eager to understand their obligations under the framework. Achieving net-zero emissions levels by 2050 will require some work. The EU’s current 2030 target calls for a 40% reduction in emissions compared to 1990 levels; the new agreement will reduce the target to 50% to 55%. Analysts said that over the next decade, this level will need to be maintained to achieve the net-zero emissions target of 2050. Government data show that since 1990, the EU has reduced carbon emissions by 23%, but at the current rate, it will only reduce by 60% by 2050.
Canfin said changes to the agreement on Monday to reassure proponents of nuclear and gas energy did not undermine EU goals for the agreement. On the one hand, the struggle for and against nuclear, on the other hand, for the fight against gas, can undermine taxonomy. From the deal last week, it became clear that nuclear energy could be identified as transition energy, and that’s it. The European Parliament has established a clear “do no harm” principle for the disposal of nuclear waste before it is deemed sustainable. This principle is also worth it, looks like a technical note.
Some EU member states, such as Poland, have delayed counteracting the organization’s climate goals, in part because of the economic damage it may cause. At the same time, a recent report indicates that 80% of coal-fired power plants in the European Union are at a loss.
Source: various Internet