European Taxonomy – “Final Stand” and retrospective

On July 5 and 6, the Voices of Nuclear demonstrated in Strasbourg to support the final vote of the European Parliament which validated the integration of nuclear energy in the EU taxonomy for sustainable activities. We use it as the opportunity to look back at the saga of taxonomy, and to the long-term contribution of our association.

This taxonomy is flawed. Many additional, restrictive conditions, even today impossible to satisfy for certain countries and leaving free rein to interpretation, are imposed on nuclear power, and will in fact limit its potential to substitute massively for fossil fuels in Europe. Gas integration is heartbreaking. But the balance sheet is objectively positive.

There is still a lot to do to fight against ideological biases and restore technological neutrality in French and European public policies, a lot to do for the climate and for the environment, but this validation by Parliament was a fundamental step.

• What is the European taxonomy of sustainable investments supported by the European Commission?

The European Commission’s current energy vision dates back to 2018 and its strategy “A Clean planet for all”. This vision was marked by the marginalization or even omission of nuclear energy, very rarely mentioned, and strongly oriented towards renewable energies. We were then talking about a 15% nuclear target and “more than 80%” of renewables.

The Taxonomy Rules:

In its effort to combat climate change, the European Commission has developed a comprehensive approach, focusing in particular on the financial sector.

This is how Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment^[1] (known as the Taxonomy Regulation) was published in June 2020. It establishes the criteria for considering an economic activity as environmentally sustainable .

To do this, it lays down four cumulative conditions: the substantial contribution to at least one of the six environmental objectives listed below, the absence of significant damage to the other objectives, compliance with social and governance guarantees, as well as meeting the technical screening criteria to verify the first two conditions.

The six environmental goals set out in the report are:

• mitigation of climate change;
• adaptation to climate change;
• sustainable use and protection of aquatic and marine resources;
• the transition to a circular economy;
• the prevention and reduction of pollution;
• and the protection and restoration of biodiversity and ecosystems.

The regulation entrusts the Commission with the task of defining sustainable activities and setting the applicable technical screening criteria. To do so, the Commission has based itself on the work of the Technical Expert Group on Sustainable Finance (TEG) whose Final Report was delivered in March 2020, followed by the technical report by the Joint Research Center (JRC) delivered in March 2021.

• What did these reports say?

Conclusions of the Final Report of the TEG:

In its final report of March 2020, the TEG indicated that nuclear energy should be considered as contributing to the objective of mitigating climate change, as its greenhouse gas emissions in the electricity production are close to zero.

However, citing the example of the long-term management of high-level radioactive waste for which there is not yet a definitive and operational disposal site, the TEG refused to conclude on the condition of no significant harm to other environmental objectives and thus to include nuclear in the taxonomy.

The TEG then recommended that an analysis be carried out of the entire production cycle of nuclear energy in order to ascertain its compliance with the principle of “doing no significant harm”, known by the acronym DNSH for “Do No Significant Harm”.

On July 2, 2020, the Commission officially entrusted this analysis to the Joint Research Center (JRC), providing that a review of its report would be carried out by the group of experts established under Article 31 of the Euratom Treaty and the Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) expert group by the end of June 2021 at latest. Nuclear energy is the only activity concerned by the Taxonomy to have been the subject of such in-depth scientific and technical expertise.

Conclusions of the JRC report:

The JRC delivered its final report on March 19, 2021.

It concludes that it has found no scientific evidence establishing that nuclear power causes more damage to health or the environment than the other electricity generation technologies already included in the taxonomy as part of the activities contributing to the mitigation of climate change. The authors stress that the impacts (excluding serious accidents) are comparable to those of offshore wind turbines.

The JRC also notes that nuclear power has the lowest premature death and fatal accident rates of all electricity generation technologies, and that all of the potentially harmful impacts on the environment and health can be avoided or prevented by applying appropriate measures.

The first part of the report deals with the evaluation of nuclear energy production according to the DNSH criterion. The JRC is interested in studying the environmental impact of each of the phases of the cycle of electricity production from nuclear energy and compares them with the impact of other sources of electricity production.

The second part deals with the more specific assessment of the long-term management and disposal of radioactive waste, including high-level radioactive waste and spent nuclear fuel.

In Annex 4, the JRC provides a list of Technical Screening Criteria (TSC) for four phases of the nuclear power generation cycle: uranium mining, plant operation generation, reprocessing of spent nuclear fuel and disposal of high-level radioactive waste.

The JRC conducted a review of the scientific literature, collecting all existing assessments and comparing their results.

It should also be noted that the JRC goes beyond the mandate given by the Commission by analyzing in particular the impacts on health, or by proposing technical examination criteria for certain phases of the production of electricity from nuclear energy.

• Why is this taxonomy important?

Taxonomy concerns the entire decision-making and financial ecosystem of a technology. Dubbed, it will be favored throughout the chain, penalized, it will also be throughout the chain.

Concretely, an activity considered “green” in the taxonomy, for example, has access to more funding, including all “green” financial tools.

The taxonomy concerns: the companies which will have to indicate the part of their turnover, their investments and their expenses which correspond to sustainable activities; Member States that put in place public measures, standards or labels for green financial products or green bonds; and financial actors, financial supervision institutions (e.g. central banks), insurance companies.

• Why is it important for nuclear to be included in the taxonomy?

Because if this had not been the case, it would have made it more difficult to extend the activity of certain existing European reactors, and the development of new nuclear power in Europe, and actually extremely difficult for small countries and “new comers” wishing to acquire their first nuclear power plant, without the support of extra-European powers such as Russia or China.

Because even if there is still a very long way to go, it could be a start to position Europe on the path to a “level-playing field” between low-carbon energies.

Because it gives us additional chances to achieve the European Union’s climate and environmental objectives.

Because the influence of Europe on the rest of the world is important in this matter.

Because otherwise it would have made European taxonomy lose its scientific credibility.

• Does it make things easier from now on?
  • Yes, because this benefits the perception that the public, the media, institutions and decision-makers in general will have of nuclear energy. Provided that we do not let the organizations unfavorable to nuclear downplay this decision based on scientific evidence;
  • it allows this decision to resonate further in subsequent decisions whether in the definitions of labels, scopes of application, lists of beneficiaries, categorizations whatever they are that will happen from now on.

And that this perception is essential to allow a certain form of acceptability to be gradually regained.

• No, because
  • the technical eligibility criteria impose conditions that are even more difficult to satisfy than what exists today at the national level, which is the accepted perimeter of authority on nuclear safety issues;
  • the assessors and decision-makers will be Commission officials who will come and lay down an administrative layer on a subject essentially technical, with deadlines that are difficult to assess, and over which it will be necessary to keep a right of scrutiny;
  • certificates of compliance with the taxonomy, which alone can give access to the associated advantages, to funding bodies in particular, will only be issued project by project and will have to be renewed;
  • the eligibility criteria, and the very inclusion of nuclear in the taxonomy will be reviewed every three years.

• How is nuclear included?
  • In a complementary delegated act, dissociated from renewable technologies immediately categorized as sustainable, associated with the gas itself subject to many conditions, and separated from a future “brown” category or another “absent” which would have been equivalent to a rejection.

In addition to activities incorporated directly as such into the taxonomy, two other categories are also considered in the taxonomy: activities that allow other activities to contribute to one of the objectives -“enabling activities” (such as construction of an infrastructure promoting soft mobility for example); activities that reduce the environmental impact in sectors for which there is no alternative (such as the production of recycled aluminium) are said to be “transitional”.

How are nuclear and gas included in the new nomenclature?

Gas and nuclear, means to produce electricity, have been integrated in the new taxonomy project. Investments in the corresponding power plants could in future be classified as sustainable.

The European Commission has set several conditions for nuclear electricity. Any new construction must present, for example, guarantees for the processing of nuclear waste and the dismantling of facilities, with also a specific project, before 2045, for the construction of a geological storage site, although these deadlines are not necessarily relevant for a new country going into nuclear. Other criteria (safety, specific fuels, etc.) are also possible depending on the technical criteria that will ultimately be adopted and on technical developments.

Furthermore, work to extend the lifetime of reactors currently in service will have to be approved before 2040. So there is an idea of “transition” and a time limit associated with it.

As for gas-fired power plants, the document specifies that they must emit less than 100 g of CO2 per kilowatt hour (CO2/kWh). Power plants that obtained their construction permit before 2030 will have a higher emissions threshold, up to 270 g of CO2/kWh. They will have to replace much more polluting existing infrastructure (coal), and use at least 30% renewable or low-carbon gas from 2026, then 55% in 2030.

• Is association of nuclear with gas a serious matter?

The inclusion of gas is problematic because it confirms for many the false perception that nuclear energy is a fossil energy, which has similar disadvantages, and that it is a transitional solution. It thus imposes in the minds and in the texts a mistrust and as a result a temporary vision of the use of nuclear energy.

This inclusion is the result of political negotiations.

Nuclear critics have maneuvered to tie them together in the same delegated act, so as to penalize nuclear by association (and so they will just have succeeded in favoring gas).

Gas is much less capital intensive than nuclear and therefore unfortunately does not need to be in the taxonomy to flourish in Europe nonetheless. The best way to get rid of gas would be to oppose it with real low-carbon competition in the field of controllable energies.

• What are the access conditions for gas?

These are very severe:

– The concerned gas-fired power plant must emit less than 100 gCO2/kWh (currently fossil gas emits 400-500 g, coal around 1000 g), by adding biogas and/or CO2 capture and storage.

– Such a power plant would represent a huge improvement if it replaced a coal-fired power plant (90% reduction in emissions), and would not be so far from photovoltaic (around 30-60 gCO2/kWh).

– Or, before 2030, there’s a tolerance of 270 gCO2/kWh, or 550 kgCO2/kW, which for a highly efficient gas-fired power plant means a right to operate 60 days a year.

– Provided there is no more profitable renewable alternative. This means that renewables have priority to reduce the share of gas as much as possible.

– And this gas must replace something worse; this replacement must lead to a reduction in emissions; the plant must be convertible to non-fossil fuels; the beneficiary country must be committed to phasing out coal.

However, there must be verifications of the correct application of these conditions, and financial penalties if necessary, otherwise the door remains open to fossil gas.

As parliamentarians will no longer have to fight over nuclear power, they will be able to focus on monitoring what is happening on the gas side, and that the regulations and the spirit of the regulations are well followed!

• Was the battle tough?

Yes, and it has been going on since late 2018.

This decision on taxonomy covers an extremely broad technological field. If the integration of wind and solar energy has been done without debate, even without analysis or consultation, hydropower and biomass, as well as other technologies affecting agriculture or mobility, have been the subject of intense talks. However, it is nuclear power that has mobilized a debate of unprecedented intensity and duration in the history of the Union. This is an indication of the polarization and very strong feelings that drive stakeholders, and influence the interests of nations and economic actors on the subject.

• What were the actors involved?

In the Council, Austria, Luxembourg, Germany, Spain and Denmark affirmed their opposition to the complementary delegated act on nuclear power and gas.

In the European Parliament, despite an objection to this additional delegated act voted in parliamentary committees, the proposal opposing the inclusion of nuclear and gas activities in the list of sustainable activities was rejected in plenary session, thus allowing this delegated act to be adopted by Parliament.

• How did the Voices contribute?

– First alert in 2018 as part of the first reflections on the structuring of green finance on a European scale.

– Participation in all consultations on the subject, and our entry into the transparency register on this occasion.

– Meetings with cabinets and parliamentarians.

– Constant monitoring and knowledge-sharing with other European associations.

– Our first press breakfast and press kit, and our thanks to Valéry de Laramée, the only journalist to have come back then 😊

– An application to the transpartisan platform of experts established on the subject.

– An open letter sent by 46 NGOs to the European Commission.

– Press releases, letter campaigns to parliamentarians, specific educational actions aimed at parliamentarians and journalists

– Relays on social networks. Pedagogy as much as possible.

– And of course, a “Final Stand”. Not so “final” after all 😊

Our contribution is nothing compared to the efforts made by anti-nuclear NGOs, but still notable as it was the first one for a citizen and pro-nuclear movement, carried out with respect for democratic institutions and principles, and necessary to recall that anti-nuclear groups do not do not represent the general opinion, nor they are the sole holders of the general interest. That is to say, citizens, with a right to vote as important as theirs, think otherwise.

Thank you to everyone who supported us, to those who led this battle also on their side. It’s been a very long time (especially when you’re not being paid to do it), and in terms of restoring real balance, it’s only just begun.

• Who else do we have to thank?

All those who have already trusted us and who have followed and relayed our actions: you. Absolutely to Foratom, which fought 1 against 100, several governments, in particular the countries of Central and Eastern Europe, the Czech Republic and Poland in the lead, the French government, the industrialists who at one point had to slow down in order not to not penalize the perception of the support obtained, the other pro-nuclear NGOs, some French parliamentarians but not all, and in particular not the President of the Environment Commission of the Parliament, who nevertheless represents the French presidential majority.

• Is it finished?
  • Following the transmission of the text to the Member States and the consultation of experts on sustainable finance, the European Commission adopted the delegated act on 2 February 2022. The European Parliament adopted it on 6 July 2022.
  • The Council of the European Union endorsed the text on 11 July 2022 , sealing the inclusion of nuclear in the complementary delegated act.
  • The next “battle of taxonomy” will probably take place in 3 years, at the possible text revision deadline.

• Now what?
  • Comes the battle of interpretation: which version “will go down in history”. Moreover, the environment remains difficult, and the obstacles to projects numerous and disproportionate;
  • The revision of the technical eligibility criteria occurring in a few years will have to be the subject of ‘special vigilance;
  • It’s time to build reactors!

Austria and Luxembourg have already announced that they will take legal action against this decision to classify nuclear and gas projects as “green” investments. This appeal should be filed with the Court of Justice of the European Union at the start of the school year. Spain and Denmark have also signaled that they will consider joining the process. Germany, on the other hand, which initially said it would “consider” the option of legal action, ultimately decided not to follow.

Focus on the conclusions of the Joint Research Center

^[1] https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex:32020R0852