The European Union has drawn up plans to classify some nuclear power and natural gas plants as green investments that can help Europe cut planet-warming emissions, a landmark proposal that could set off a resurgence of nuclear energy on the continent in the coming decades.
The European Commission said it had begun consultations with European Union countries on the proposal, which is intended to provide a common set of definitions of what constitutes a sustainable investment in Europe. A majority of member states or the European Parliament would have to approve the final plan.
The Commission considers natural gas and nuclear to be a means to facilitate the transition towards a predominantly renewable-based future.
The proposal caps one of the most heated political battles in Europe at a time when its leaders have pledged to pull the planet back from the brink of climate catastrophe. The pronuclear bloc, led by the President of France, was formed in order to overcome objections from Germany and other countries that are wary of a proliferation of nuclear power on European soil.
A draft legal text was circulating over the weekend. Natural gas and nuclear power are considered to be green energy sources that can be used to bridge countries' moves away from coal and carbon-emitting power towards clean energy technologies.
One of the biggest concerns for the German-led bloc is the safe disposal of radioactive waste. New plants would be considered sustainable investments through 2045 and would have to undergo safety upgrades during their lifetime to ensure the highest possible safety standards.
If natural gas plants meet certain emissions criteria, they would be considered a transition green energy source for investment purposes.
The European Union is trying to make climate considerations part of its financial rules in order to support the Green Deal, which aims to make Europe a net-zero emitter of greenhouse gases by the year 2050.
The rules are intended to drive private capital and public money to renewable investments and prevent "greenwashing" when companies make irresponsible claims of helping clean the environment.
Nuclear and natural gas can provide critical sources of electricity as economies transition to cleaner sources like wind and solar, and new technologies like hydrogen power.
Carbon dioxide emissions from burning natural gas and the environmental hazard of nuclear plants are some of the reasons why neither should be considered a green investment.
The European Parliament is expected to oppose the commission proposal. The entire climate leadership of the European Union is down the drain if natural gas is classified as a green investment, according to Bas Eickhout, a Green lawmaker from the Netherlands.
Mr. Eickhout said that it would send the wrong signal to the world. If Europe calls an investment in gas green, what is the reason for the African Union not to do the same?
The debate has become a proxy fight for the future of energy in the bloc.
Nuclear power is the most politically fraught issue.
Nuclear energy and natural gas were classified as sustainable investments by a coalition led by France. As they move away from fossil fuels, Poland, Hungary, Bulgaria and Romania want to attract more investment for nuclear power.
Germany, along with Austria, Luxembourg, Portugal and Denmark, have expressed concerns about a build up of nuclear power plants and the radioactive waste they produce.
Alexander Lehmann, head of the sustainable world academy at the school of finance and management, said that different visions of low-carbon transition made it up to the political agenda. He said that the costs of the transition begin to sink in on people. Key oppositions have been out in the open.
Nuclear and gas energy are included in Europe's sustainable investment rule book, known as a green taxonomy.
In Europe, it would open billions of dollars in state aid for nuclear energy projects. Nuclear energy companies and natural gas are included in sustainable investment funds that banks and pension managers offer to or invest in for clients.
According to the head of sustainable investing at Credit Suisse, nuclear was not considered to be ESG friendly. She said that E.U. approval would open up a big wave of investment dollars. She said that a lot of ESG money could find its way in this direction.
The European Commission's panel that advised on nuclear and natural gas was co-president of the Club of Rome.
She said that the European Commission Advisory Platform on sustainable finance concluded earlier this year that nuclear power plants posed risks of significant harm to the environment because of the radioactive waste they generate and concerns over the safety of storing it.
She said that they couldn't give it a clean bill of health.
Tsvetelina Kuzmanova, an expert on sustainable finance and a policy adviser at E3G, a Brussels think tank, said that including nuclear and natural gas in the taxonomy amounted to calling something that isn't green, green.
She warned that the European Union's final ruling could lead to a race to the bottom in other countries.
It could take years before the E.U.'s rule book comes into force.
Nuclear power is a low-carbon solution to achieve climate change, and a new generation of smaller, cheaper plants across the globe, said George Borovas, head of nuclear practice at the global law firm Hunton Andrews Kurth.
He said there will be a nuclear renaissance. It won't be for everyone, but it will be for a number of countries.
Investment money wouldn't start flowing right away. Nuclear and gas will need to be included in the sustainable investment governance of funds offered to clients.
Small modular nuclear reactor projects need to get off the ground. It is early days. There are a few people with business plans.
The investments will scales up as the industry grows. A number of companies are working on models that can be put together in factories and assembled on site at a fraction of the cost of traditional nuclear plants.
Ms. Drew said investors were looking at small nuclear plants as a potential power source for factories, desalination facilities or even cryptocurrencies miners.
She said that they wouldn't get the genie back in the box.
Elian Peltier was involved in reporting.
