Natural gas and nuclear power: sustainable within the Green Deal? European Commission proposes Delegated Act.

On New Year’s Eve the Commission caused a stir with its decision to classify investments in nuclear and gas-fired power plants as sustainable under certain conditions (press release). As an interim solution these technologies shall continue to be expanded and not dismantled. The draft stipulates that licences for nuclear power plants are within the scope of Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (Taxonomy Regulation), provided the latest technical standards are met and a plan for radioactive waste management is presented until 2050. For gas plants, the Commission wants to establish stricter requirements, for example it must be proven that the energy production could not be provided by renewable energies. Moreover, the plants must replace old plants that used fossil fuels and the gas must have low emissions or come from renewable sources by 2035.

The Taxonomy Regulation is directly effective in all Member States and entered into force on 12 July 2021. It classifies which investments may be considered “green” by categorising which economic sectors are considered sustainable in view of the European Green Deal. The goal is to provide investors with sustainable financial products that are guaranteed to contain clear information based on a level playing field. The Taxonomy Regulation allows the Commission to establish the technical evaluation criteria for determining sustainability in Delegated Acts. Due to this delegation the Commission may itself issue regulations of general application in the form of Delegated Acts, although without being considered a law. Correspondingly, the Commission now has drafted a complementary Delegated Act to the Taxonomy Regulation.

According to Art. 290 TFEU, the Parliament and the Council may empower the Commission to enact Delegated Acts. Non-essential points of a Legislative Act can thus be complemented or amended by the Commission. The Legislative Act must explicitly state the delegation of power including its goals, content, scope, and duration. However, each of the actual legislative bodies still has the right to object to the Commission’s decision within a reasonable period and prevent the Act from coming into force, or to withdraw the Commission’s power to issue these Acts. To exercise these rights, a simple majority of the Parliament or a qualified majority of the Council is required.

In a first Delegated Act issued in April 2020 the Commission had already established technical evaluation criteria for economic activities that contribute significantly to climate protection or adaptation to climate change. That Delegated Act, which came into force on 1 January 2022, had left out the question of the evaluation of gas and nuclear energy though.

The Commission prepared its latest draft that adds evaluation criteria for gas and nuclear energy power plants based on a technical report of the Commission’s own scientific service and assessment reports from expert groups. The draft now initiates the expert consultation required before the adoption of the Delegated Act. The deadline for submitting comments expires on 12 January 2022. After reviewing the comments, the Commission will most likely adopt the Delegated Act and then forward it to the Council and the Parliament. The Delegated Act, however, can only enter into force if neither the Parliament nor the Council raise objections within a four-month period (which can be extended by two months).

The Parliament may reject the draft by a majority of at least 353 members in plenary. The so-called reverse qualified majority of the Council required for a rejection is 72 % of the Member States, which means at least 20 out of 27 Member States representing at least 65 % of the EU population. Looking at the political situation, it is not very likely that such a majority will be achieved. Large Member States like France have a strong preference for nuclear power, at the same time, Member States that have moved away from nuclear power such as Germany will likely profit from the preferential treatment of gas-fired power plants. In fact, apart from Austria and parts of the German government coalition, only few member states have spoken out against such a classification so far.