Austria’s Climate Minister Is Taking the E.U. to Court
To most climate scientists and environmentalists, conversations about trying to address climate change with natural gas are a nonstarter. While burning natural gas has lower carbon dioxide emissions than coal, the methane emissions released—often in undetected or unmonitored leaks—has a short term climate warming potential 80 times that of carbon dioxide. Even if those leaks were mitigated, we don’t have time to build infrastructure that only takes us part way to net-zero emissions.
But last week, the European Union parliament passed a controversial proposal that would categorize both gas and nuclear energy as sustainable investments under the E.U.’s green taxonomy. When the regulation comes into effect at the beginning of next year it will open the door to billions of dollars in new funding for such projects from investors looking to align their spending with international climate targets.
There are some limitations to which investments would qualify: natural gas projects would have to replace coal infrastructure, for instance. Still, for much of the world’s climate community the new measure amounts to a betrayal of the E.U.’s climate goals—the latest in a series of major compromises by the world’s developed economies that will further delay the transition away from fossil fuels.
Austria’s Minister for Climate Action Leonore Gewessler, a member of the nation’s Green party, has said her country plans to challenge the decision in the E.U.’s highest court. Luxembourg has lent its support to the lawsuit, which they plan to file together when the new taxonomy enters into force in January.
Gewessler corresponded with TIME over email about the implications of the E.U. parliament greenlighting the nuclear and gas proposal from the E.U. commission (the bloc’s executive branch), and Austria’s plan to stop it. This interview has been edited for length and clarity.
TIME: What is Austria’s view on the E.U. decision to include gas and nuclear in the green taxonomy?
Gewessler: Austria‘s goal is to become climate-neutral by 2040. This means moving away from fossil fuels and towards an efficient economy based on renewable energy sources. Turning away from fossil and nuclear fuels also strengthens Austria and Europe’s energy independence. However, that transformation requires investment, which is where the financial sector comes in. This transformation is a great opportunity for the sector. At the same time, the financial sector has a great responsibility to help redirect financial flows towards truly green solutions as stipulated in the Paris Climate Agreement. In a credible, ambitious, and science-based taxonomy, nuclear and gas are not part of that picture.
Why should gas not be included? What about nuclear power?
There are many problems with categorizing nuclear energy as a “transition technology”. First of all, nuclear power plants take many years to build, which means nuclear energy cannot make a significant contribution to protecting the climate in the timeframe needed. Secondly, there are already cost-effective alternatives available, namely cheap and rapidly expandable renewable energies. On top of this, nuclear energy is extremely expensive. Classifying nuclear energy as “environmentally sustainable” entails the danger of misallocating capital to a technology of the past. If funds remain tied up in nuclear energy they are no longer available for renewable investments. In addition, there is clear evidence that nuclear energy causes significant harm to other environmental objectives. Furthermore, the question of a safe final disposal of radioactive waste has not been resolved to date.
In the case of gas, the question arises as well, as to why the European Commission assumes that there are no technologically and economically available alternatives. We are talking about a fossil fuel, and there are renewable alternatives. Certifying gas as sustainable creates new competition for funds that should be channeled towards truly green alternatives. Moreover, these investments cause fossil infrastructure lock-in, which the Taxonomy regulation was supposed to prevent at all costs. Modern gas-fired power plants have lifetimes of 25-30 years. These long lifetimes create a high risk that fossil gas investments could be stranded. Furthermore, the emission limit for newly built plants until 2030 would be 270-gram CO2 per kWh, which is not ambitious enough. Even the E.U. Commission’s own expert group concluded that only a 100-gram limit is compatible with the Paris climate protection goals.
What will be the consequences of this decision—assuming it stands?
The taxonomy is the basis for green financial product labels. For example, the E.U. Green Bond Standard is currently in development, which may contain primarily taxonomy-compliant activities. The E.U. Ecolabel and subsequently other state labels will also use the taxonomy as a basis for placing green financial products on the market. Here, credibility for investors should come first. We need to protect consumers‘ trust in the taxonomy and therefore avoid greenwashing fossil gas and nuclear. Many popular sustainability labels do that and exclude nuclear and fossil gas, such as the French GreenFin, the Scandinavian Nordic Swan, or the Austrian eco-label. Additionally, the aim of the taxonomy regulation is to redirect capital flows to activities that ensure the achievement of our environmental goals. If any activity contributes to the climate protection goal, it must also ensure that it does not endanger other environmental goals—only then can it be really “ecologically sustainable.”
With the proposed criteria, we fall behind existing market standards for the certification of green financial products. The level of ambition is even below the taxonomies of other countries such as Russia and China. As a result, the E.U. risks not living up to its own claim to be a global leader in climate and environmental protection.
Why did the EU pass this decision?
We have to assume the E.U. Commission’s decision-making process was heavily driven by fossil and nuclear lobbies. The E.U. Commission sent out a proposal in a cloak-and-dagger operation—shortly before midnight on New Year’s Eve in 2021. The publication’s timing alone shows it is obviously a controversial subject in the E.U. Commission itself, and the E.U. Commission is not convinced of its own decision to greenwash nuclear power and fossil gas. If one reads the Commission’s proposal more closely, it is full of political statements and formulations that seem to come directly from lobbies. The approach as well as the content of this legal act is not a glorious chapter for the European Commission.
What is Austria’s plan to challenge the decision?
Austria is convinced that the taxonomy as it now stands is diametrically opposed to Austria’s goal of a credible, science-based, and ambitious taxonomy. As soon as this delegated act comes into force on January 1, 2023, Austria will bring its already prepared action for annulment under Article 263 Treaty on the Functioning of the European Union before the Court of Justice of the European Union.
What is the legal argument behind the challenge?
In our point of view, the E.U. Commission cannot make such a far-reaching decision in a delegated legal act. In addition, there were several breaches of binding procedural rules in the adoption of the delegated act. The E.U. Commission failed to carry out an impact assessment of the act and failed to initiate a transparent and open consultation process, and the Commission has not given the Member States’ Expert Group the opportunity to take due account of the assessment of the Sustainable Finance Platform. By sending the act to the Member States’ Expert Group and to the Platform on December 31 with a comment period of less than 2 weeks, the Commission also did not provide sufficient time to assess and comment.
Furthermore, there are many points which, from our point of view, are legally questionable, e.g. the considerable damage that nuclear power has already caused and causes at regular intervals are not sufficiently taken into account. The possibility of a severe accident scenario, something like Fukushima, cannot completely be ruled out, according to the heads of the nuclear safety and radiation protection authorities.
We have also commissioned a legal opinion on nuclear power in the taxonomy from the law firm Redeker Sellner Dahs. They conclude that nuclear power does not meet the sustainability criteria of the Taxonomy Ordinance. Therefore, there is no legal basis for including nuclear power in the taxonomy. The precautionary principle was also not sufficiently taken into account. In our view, the proposed threshold values clearly contradict the goals of the Paris climate protection agreement.
How long will the legal process of challenging the decision take? What do you expect are your chances of success?
Our position in Austria is, and remains, very clear: we advocate an ambitious, science-based, and transparent E.U. taxonomy without greenwashing, which ensures Europe’s climate goals and frees itself from Russian energy dependency as quickly as possible. This is the only way to make our energy network resilient and fit for the future.
The pre-existing taxonomy already covers all important economic sectors that can make a significant contribution to climate protection, i.e. renewable energy sources, energy efficiency, or zero-emission mobility.
We are aware that it will not be easy. However, we brought very good arguments to the table and are very confident. Luxembourg has already agreed to participate in a lawsuit. And we will continue to use the forthcoming weeks and months to gain more allies. Criticism of the inclusion of nuclear energy and fossil gas in the Taxonomy Regulation has been voiced by Denmark, Germany, Spain, Portugal, and Sweden as well.
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