Following the publication by the EU Commission of the draft Taxonomy Complementary Delegated Act, the Socialists and Democrats Group in the European Parliament addressed a letter to the President of the European Commission, Ursula von der Leyen, and to the Commissioner for Financial Services, Financial Stability and Capital Markets Union, Mairead McGuinness. In the letter, S&D vice-president and shadow rapporteur in the environment committee, Simona Bonafè, and S&D shadow rapporteur in the economic affairs committee, Paul Tang, expressed their opposition to the labelling of gas and nuclear-based energy production as taxonomy compliant.

While recognising the role played by gas and nuclear to meet the energy needs nowadays towards the transition to a climate neutral EU, we believe the EU taxonomy should fulfil its ambition to be the global ‘gold standard’ for sustainable finance and pave the road to the EU’s alignment with the Paris Agreement. The proposed Complementary Delegated Act falls short on both goals.

Hence, we propose creating a separate ‘amber’ category for gas and nuclear which would not count as ‘taxonomy-aligned’ but does acknowledge they could contribute in the transition to sustainability objectives without being sustainable energies themselves.

S&D vice-president and shadow rapporteur in the environment committee, Simona Bonafè, said:

“The EU taxonomy is supposed to create trust and transparency for investors and has the potential to both influence the EU’s future energy system and to contribute significantly to the extent to which the EU is able to rise to the challenge of the climate crisis. The draft on nuclear and gas presented by the European Commission is not responding to the ambition of the taxonomy regulation to set a science based golden standard for sustainable investments at an EU level. Including nuclear and gas among taxonomy compliant economic activities, in the form of the current Delegated Act draft, is a wrong political message, both from an environmental and economic point of view”.

S&D shadow rapporteur in the economic affairs committee, Paul Tang, explained:

“For a global leader in the fight against climate change, labelling fossil gas and nuclear as sustainable is a strange hill to die on. Fossil gas contributes to climate change through CO2 emissions and methane leakages. Nuclear waste is highly contentious in many EU countries. Their inclusion in the ‘EU Taxonomy’ will not only pollute our environment, but also the efforts of the EU to turn financial markets into an engine for sustainable growth. A trustworthy taxonomy requires science as its basis, not back room doors between a few EU leaders.

“As such, we do not see how the S&D Group can support this Commission proposal. A way forward is to create an amber category for gas and nuclear through an amendment to the taxonomy regulation. They contribute to sustainability objectives, but cannot be called sustainable themselves.”