Luxembourg MEPs Reject Inclusion of Gas & Nuclear in EU Taxonomy, Agree Commission Overstepped Mandate

On Wednesday 6 July 2022, the European Parliament rejected a proposed objection to the European Commission’s approval on 2 February 2022 of the "Climate Delegated Act" which, under strict conditions, included gas and nuclear energy activities in the list of sustainable economic activities covered by the European Union (EU) taxonomy.

The resolution was rejected by a 328-278 vote, with 33 Members of the European Parliament (MEPs) abstaining. An absolute majority of 353 MEPs was needed for the Parliament to veto the European Commission’s proposal. All six MEPs from Luxembourg voted in favour of Wednesday’s resolution, i.e. to reject the inclusion of gas and nuclear energy activities in the EU taxonomy.

Chronicle.lu reached out to Luxembourg's MEPs to learn more about the reasons behind their decision.

Concerning the motivation behind the motion to oppose the inclusion of nuclear and gas as environmentally sustainable economic activities, MEP Marc Angel, from the Group of the Progressive Alliance of Socialists and Democrats (S&D Group), said that there were several reasons but the most important ones were:

• nuclear power and fossil gas are, at the end of the day, not sustainable;
• the Parliament was essentially circumvented in the decision-making process as the Commission used a delegated act to change a substantive part of EU legislation, a move which we (S&D Group) believe they overstepped their mandate given to them in the Taxonomy Regulation;
• Despite the Commission's claims to the contrary, the decision was ultimately politically driven rather than science-based.

Mr Angel clarified: “We recognise the importance of both in the transition towards climate neutrality (and the taxonomy does not prohibit investment in either), yet including them in the taxonomy sends the wrong political message, both environmentally and economically speaking. The specific aim of the taxonomy was to create a 'gold standard' for sustainable finance. The inclusion of gas and nuclear undermines this objective and does not create the envisaged trust and transparency for investors, and is a setback in the EU's fight against climate change”.

MEP Tilly Metz, Group of the Greens, echoed similar concerns. She said: “Many MEPs, especially amongst Greens, Socialists and Democrats, and the Left, were not happy, both with the way the Commission proceeded with the delegated act, not allowing for proper public consultation and not taking into account the many criticisms it received from EU countries, scientists, and the finance industry, before formally adopting the text, nor its scheme to include gas- and nuclear energy in the taxonomy”. She further argued: ”Nuclear energy is not sustainable. It is an inefficient, expensive and dangerous technology that will pollute our environment for hundreds of years to come … [while fossil] gas keeps pumping CO2 into our atmosphere and contributes significantly to global warming”. MEP Metz felt that instead of further investments into these obsolete technologies, a way out of them as soon as possible was needed. “That’s why we can’t accept them being included in the EU taxonomy”.

MEPs Christophe Hansen and Isabel Wiseler-Lima from the European People's Party (EPP) Group, issued a joint statement, whereby they said: "Gas and nuclear energy can technically not be qualified as sustainable energies and hence should not feature on the taxonomy on sustainable finance". Both the MEPs agreed that even though the two energy mixes will remain in the short- to medium-term future, nuclear and gas related projects should not be eligible to be financed under a green label. "This seriously undermines both our credibility towards the financial market participants as well as our objectives under the Green Deal", the MEPs corroborated.

When asked what inspired them to decide to vote in favour of the motion (i.e. to oppose this inclusion), MEP Angel commented: “I opposed the Commission's attempt to greenwash the EU taxonomy”, while MEP Metz pointed out the “lack of transparency and public participation in the elaboration of the delegated act”. Moreover, she had the opinion that the Commission published the text on purpose during the holidays and did not react to the criticism the text received - from governments, politicians, scientists, citizens and the finance industry itself.

MEP Metz added: “It is clear that the Commission saw this as their only chance to get nuclear energy into the taxonomy, which was nothing less than a personal favour to some countries, above all France and its president Macron, while offering the inclusion of gas as a fig leaf to get those countries which are more dependable on the latter on board as well, knowing that the text could not be amended later in Parliament or in the Council”. She also considered that the inclusion of gas and nuclear energy in the taxonomy as sustainable energies discredited the taxonomy as a consistent classification of sustainable energy investments, meant to guide public and private investments, in the EU and beyond, into sustainable energy infrastructures. “If the taxonomy now becomes nothing but a greenwashing instrument for gas and nuclear energy, then it loses all its credibility on the markets and can’t serve as a basis for investments and public policy decisions”.

For MEP Metz, the important factor for her decision to vote in favour of the motion was that “fossil and nuclear energy are not the future of our energy supply, but a past that we must leave behind as fast as possible”. However, with the Commission’s delegated act, investments into gas and nuclear energy would be encouraged for decades to come, and the infrastructure and plants financed thereby could be active until 2100, cautioned MEP Metz. She emphasised: “[It is] vitally important [that] we invest as much as we can in renewable, efficient and sustainable energies, such as solar and wind”.

MEPs Hansen and Wiseler-Lima stated: "The delegated act will only allow a very limited [number] of countries to finance gas and nuclear related projects. For nuclear projects to be covered, the Member State in which the nuclear installation will be built needs to provide a plan to have an operational depository for high-level radioactive waste by 2050. Only three member states, namely France, Sweden and Finland will be able to finance their nuclear projects under EU taxonomy. For gas, the Member State must have existing coal power plants, which are substituted by gas-fired plants with up to 15% greater capacity. Moreover, there needs to be a national coal phase-out date and it needs to be reported in its National Energy and Climate Plan. On this basis, 100% of the planned gas infrastructures would not be eligible, notably in Poland, Lithuania, Latvia, Estonia, Malta, Cyprus, Belgium, Austria and Portugal." They added: "Furthermore, the delegated act will not make us more independent from Russian gas on the short term. This is also due to the fact that LNG (Liquefied natural gas) terminals are not covered because the activity does not include 'electricity generation' or 'co-generation of heat and power': they rather degasify LNG and store it".

When asked if this was an independent decision or a collective agreement among Luxembourg's six MEPs, MEPs Angel and Metz confirmed that it was an independent decision for each MEP but they were glad that all six Luxembourgish MEPs rejected the Commission's proposal. MEP Metz added: “[The consensus] reflects Luxembourgish government’s position as well as the general Luxembourgish consensus against nuclear energy”. MEPs Hansen and Wiseler-Lima confirmed that they agreed to oppose the delegated act together from the beginning but it not a collective agreement between the six MEPs. However, they noted, that all MEPs were quite vocal on their intention to object the delegated act.

In relation to the Luxembourg government’s announcement on 6 July 2022 that it is now preparing to join a legal action against the European Commission, initiated by Austria, both the MEPs Angel and Metz, were in favour of such an action. MEP Angel said: “[We] will follow closely what the [European Court of Justice] ECJ will have to say”, while MEP Metz highlighted: “Now that the attempt to get a veto from Parliament unfortunately failed, and as a majority in the Council is very unlikely, this is our last chance to prevent gas and nuclear energy from being labelled as sustainable activities”. MEP Hansen added: "Even if I would have hoped to have a different outcome, the majority [at the European Parliament] decided to vote against the objection and I will accept that democratic decision".

Update: Since the publication of this article on 12 July 2022, Chronicle.lu has received a reply on behalf of MEP Charles Goerens (Renew Europe Group) who, before the vote, had stated: "Whatever the outcome of the vote, the attitude of the Commission cannot hide its dismay at the inability of the Member States to agree on the most effective, most sustainable and least expensive way to achieve the climate neutrality". MEP Goerens added: "As I do not intend to endorse this attitude of the Commission, which is a source of confusion and incomprehension, I have decided after careful consideration to vote against its proposal".

Chronicle.lu has not yet received a reply from MEP Monica Semedo (Renew Europe Group).