German industry scores gas win in EU taxonomy

The European Commission has presented its second delegated act for the EU’s sustainable finance rules and under certain conditions, nuclear power and gas will be labelled “green”, making German industry happy.

The EU’s so-called green taxonomy regulates which investments can claim to be sustainable in the financial markets. The inclusion of nuclear power had raised heckles in anti-nuclear states, while others opposed the inclusion of gas.

Germany submitted a list of requests to ease restrictions on fossil gas on 21 January while publicly decrying the inclusion of nuclear, but the finished proposal contains both.

“We have taken a realistic and pragmatic approach to the inclusion of nuclear and gas in the taxonomy,” an EU official told journalists on 2 February.

“The taxonomy helps signpost the way for private investment to contribute to our climate goals,” explained Finance Commissioner Mairead McGuiness, noting that governments would not be able to provide the €350 billion of annual investments Europe needs to become climate neutral by 2050.

The delegated act “will accelerate the private investment we need, especially in this decade,” noted European Commission Vice-President Valdis Dombrovkis.

As the month-long row over whether nuclear and gas should be included in the bloc’s green finance rules come to an end, there are some clear winners. France’s EDF can now attract “green” funding for its partially defunct nuclear power fleet, and German utilities and industry have their wish to have gas included fulfilled.

“With the delegated act on EU taxonomy, the EU Commission basically recognises the central role of these transformation [gas] power plants on the way to climate neutrality. It is also good that the EU Commission has made further improvements,” explained Ingbert Liebing, head of German utilities association VKU.

German industry had given early signs to the German government that including gas in the EU taxonomy would be crucial.

“For the period of the changeover, the future German government should work to ensure that the EU continues to recognise natural gas as eligible in the taxonomy,” said Siegfrid Russwurm, head of the influential German business association BDI, in November.

Subsequently, Berlin expressed its support for including gas in the taxonomy in a statement sent to Brussels in January. “With this statement, the new federal government is demonstrating a willingness to shape the future,” lauded Liebing afterwards.

The European Commission had initially sought to make a green label for new gas power plants contingent upon the use of certain shares of low carbon gases like hydrogen.

In 2026, the Commission wanted gas power plants to blend in 30% low carbon gases, increasing to 55% in 2030 before going full low carbon by 2035. Berlin had called these plans “unrealistic.”

Subsequently, the European Commission had done away with so-called “fuel-switch” requirements but stayed firm on a 100% switch to carbon-neutral gases in 2035.

“The changes come in light of technical observations of the member states, from the platform and from the European Parliament,” an EU official explained.

“Removal of unrealistic targets for hydrogen by 2026/30 are important success of #Ampel,” tweeted Lukas Köhler, vice-chair of the German liberals, after the Commission had revealed its proposal.


The changes, in part affected by the German government, had not gone down well with civil society.

“The German government has prevailed with its demand to weaken the gas criteria. This is not worthy of a self-declared climate government,” said Johannes Schroeten, policy advisor for EU sustainable finance at think-tank E3G.

Nonetheless, far from all demands of the gas industry were fulfilled. The carbon budget per power plant of 550 kg of carbon emissions per kilowatt of capacity, equivalent to running for 2000 hours a year for 20 years, had not been touched despite Germany’s gas industry lobbying.

Berlin-Brussels disconnect

The row over the classification of gas and nuclear had also revealed cracks in government parties in Berlin and their EU counterparts. The Berlin government is made up of social democrats SPD, the Greens and the liberal FDP, who together championed gas in their statement sent to the European Commission in January.

“Nuclear power does not meet these criteria, and no amount of greenwashing by the EU Commission will help. The transition criteria for the use of gas to generate electricity are also inadequate,” explained Joachim Schuster, EU lawmaker of the German SPD in the EU parliament.

The German Greens in the EU parliament support his point of view. “We Greens are disappointed in the EU Commission’s adherence to the inclusion of nuclear and gas in the taxonomy,” noted Rasmus Andersen, EU lawmaker and leader of the faction.

The opposition of EU lawmakers may prove crucial, as 353+1 votes in the European Parliament appear to be the last legislative opportunity for opponents of the inclusion of gas and nuclear.

[Edited by Alice Taylor]


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