On Monday March 9th, the Technical Expert Group on Sustainable Finance (TEG) submitted its report to the European Commission concerning the list of activities considered to be green enough for Europe’s 2050 climate objectives. Referred to as the European taxonomy, this list is meant to guide sustainable investment in the right direction for decades to come.
The in-depth report lists 70 business sectors whose combined activities represent 93% of Europe’s CO2 emissions. Experts have agreed on everything except nuclear energy, which remains a grey area. "The evidence provided on the potential substantial contribution of nuclear energy to climate mitigation objectives is extensive and clear. The potential role of nuclear energy in low-carbon energy supply is well documented", confirmed the experts.
However, they added that "with regard to significant potential damage to other environmental objectives, including the circular economy and waste management, biodiversity, water systems and pollution, the evidence is more difficult and complex to assess in a taxonomic context". Experts noted that a safe, long-term waste storage solution has yet to be found anywhere in the world.
A need for in-depth studies
This is the objective of the taxonomy. To be included, a given sector must have limited CO2 emissions and not harm the environment. In this context, the TEG determined it could not agree on whether or not to include nuclear energy. "It has not been possible for TEG, or its members, to conclude that the nuclear energy lifecycle does not and will not cause significant harm to the sustainability objective. The TEG, therefore, did not recommend inclusion of nuclear energy in the taxonomy at this stage," affirmed the experts.
According to the TEG, the nuclear question must be dealt with by "a group with in-depth technical expertise". Questioned by the AEF, Michele Lacroix, Head of Group Investments at Scor and member of the TEG explained that "we have not changed our conclusions because these are two political sectors which exceed our technical skills. It is up to the European Commission to decide".
When asked by Novethic, EDF representatives determined that "there is no shortage of money. We must orient [our resources] towards carbon-free solutions. We want all low-carbon energy solutions to find their proper place within the taxonomy, including nuclear energy". The French electric company, along with the French government, have been very involved in the inclusion of nuclear power. They are both convinced that the next generation of power plants will require "a regulation that makes it possible to contribute to financing and raises the profile of compensation", as explained by EDF Financial Director Xavier Girre in the Essential of Sustainable Finance.
Ludovic Dupin @LudovicDupin