Nuclear and gas criteria set for inclusion in EU taxonomy

The Commission began consultations on 31 December with the Member States Expert Group on Sustainable Finance and the Sustainable Finance Platform on a draft text of a Taxonomy Complementary Delegated Act (CDA) covering certain gas and nuclear activities. This document was subsequently leaked and published by independent European media network Euractiv. In an unexpected move, the Commission has decided not to release this proposed CDA for public consultation, claiming that enough consultation has already taken place.

The proposed CDA elevates three distinct nuclear energy activities into the taxonomy: demonstration units for advanced nuclear technologies; the construction of new nuclear power plants using best available technologies; and electricity generation from existing nuclear installations. It also includes three fossil gas activities: electricity generation; high-efficiency cogeneration; and district heating. The gas activities are clearly listed as transitional, meaning that they will eventually be phased out of the taxonomy as more sustainable alternatives become available. The last date for the construction of gas projects to be taxonomy compliant is 31 December 2030.

The status of nuclear energy outlined in the proposed is more ambiguous. On the one hand the CDA notes that "evidence on the potential substantial contribution of nuclear energy to climate mitigation objectives was extensive and clear". The word transitional is not used in relation to nuclear energy at any point which seems to indicate that nuclear is recognised as making a significant contribution to mitigating climate change. However, complicating matters is that sunset clauses are included for new nuclear construction and the long-term operation of existing plants. These must be authorised by competent authorities by 2045 and 2040, respectively.

The proposed CDA also outlines criteria that individual nuclear projects must meet to be considered taxonomy compliant. Stand-out criteria include that new nuclear construction projects must be based on "best available technology", a term that will be revised every ten years by the European Nuclear Safety Regulators Group. A new nuclear project must fully comply with the European Nuclear Safety Directive and respect the technical parameters of International Atomic Energy Agency standards and the Western European Nuclear Regulatory Association. In particular, measures must be in place to protect against external hazards such as flooding and extreme weather.

Waste and decommissioning funds must be in place and there must be operational facilities for the disposal of low and intermediate-level waste streams, with a plan in place for a high-level waste disposal facility to be operational by 2050 and notable progress towards the realisation of this. A further requirement stipulates that new projects must use accident tolerant fuel. Notification and reporting requirements to the European Commission are also set, and lifecycle greenhouse gas emissions must be below the threshold of 100g CO2e/kWh.

For existing nuclear installations undertaking modifications for the purposes of life-extension and for demonstration units, the reference to best available technology is dropped. The EC noted the criteria for both the gas and nuclear activities will be updated regularly as technology evolves.

The Platform on Sustainable Finance and the Member States Expert Group on Sustainable Finance, which must be consulted on all Delegated Acts under the Taxonomy Regulation, will have until 12 January to provide their contributions. The Commission said it will analyse these contributions and formally adopt the Complementary Delegated Act in January 2022. It will then be sent to the co-legislators for their consideration.

The European Parliament and the Council will have four months to examine the document. In line with the Taxonomy Regulation, both institutions may request an additional two months of scrutiny time.

Once the scrutiny period is over and assuming neither of the co-legislators object, the complementary Delegated Act will enter into force and apply.

History of nuclear energy and the EU Taxonomy

The EC launched its Action Plan on Financing Sustainable Growth in March 2018 and adopted a package of measures two months later. Then, in July 2018, a Technical Experts Group (TEG) on sustainable finance set up by the Commission began assisting it in developing a unified classification system for sustainable economic activities. The TEG published its Taxonomy Technical Report in June 2020. Nuclear energy was "not included due to lack of information".

The Commission subsequently requested the Joint Research Centre (JRC) draft a technical report on the 'do no significant harm' aspects of nuclear energy. This would be reviewed by the Euratom Article 31 expert group and by the Scientific Committee on Health, Environment and Emerging Risks. The JRC assessment considered the effects of the whole nuclear energy lifecycle in terms of existing and potential environmental impacts across all objectives, with emphasis on the management of the generated nuclear and radioactive waste. The JRC concluded that nuclear energy does no more harm to human health or the environment than other power-producing technologies considered to be sustainable.

In April last year, the European Commission announced that, depending on the results of the the JRC assessment and the two reviews, it would include nuclear energy in a complementary Delegated Act to the EU Taxonomy Regulation. This same document would also include natural gas as a transitional activity that could assist with decarbonisation at least in the short term.

The reviews were completed at the end of July, but the Commission refused to clarify its intentions regarding nuclear energy and delayed publishing a complementary Delegated Act until the very end of the year.