EU Parliament backs green investment rules
Flags of the EU fly on June 29th, 2020 in front of the European Commission headquarters in Brussels, Belgium. ZHANG CHENG XINHUA BRUSSELS The European Parliament on Wednesday backed EU rules labeling investments in gas and nuclear power plants as climate-friendly, which is a way to block the law that has exposed deep rifts between countries over how to fight climate change.
The vote will give the European Union proposal a chance of passing into law unless 20 of the 27 member states vote to oppose the move, which is seen as very unlikely.
Out of 639 lawmakers present, 328 opposed a motion that tried to block EU gas and nuclear proposals.
The European Commission welcomed the result. After more than a year of delays and intense lobbying from governments and industries, the rules were proposed in February.
The EU financial services chief Mairead McGuinness said that the Complementary Delegated Act is a pragmatic proposal to make sure private investments in gas and nuclear are needed for our energy transition and meet strict criteria.
The rules have split EU countries, lawmakers and investors. Brussels redrafted the rules multiple times, flip-flopping over whether or not to grant gas plants a green tag. The final proposal sparked fierce debate about how to hit climate goals amid a crisis over Russian gas supplies.
It is a fossil fuel that produces planet-warming emissions but far less than coal, and some EU states view it as a temporary alternative to the dirtier fuel.
Nuclear energy is free of CO2 emissions but produces radioactive waste. Supporters such as France say nuclear is vital to meet emissions-cutting goals, while opponents cite concerns about waste disposal.
The election resulted in a good deal for energy security and emissions-cutting targets, according to Slovakian Prime Minister Eduard Heger.
He said we'll be on the way to climate neutrality by the year 2050.
Luxemburg and Austria, both opposing nuclear power and warning against labeling gas as green, said they would challenge the law in court.
It is not credible, ambitious nor knowledge-based, endangers our future and is more than irresponsible, Austrian climate minister Leonore Gewessler said.
Greenpeace said it would also mount a legal challenge, despite the fact that climate campaigners criticized the move.
According to Anders Schelde, chief investment officer at Danish pension fund AkademikerPension, said this is a poor signal to the rest of the world that may undermine the EU's leadership position on climate action.
Industry groups welcomed the vote. Ingbert Liebing, the managing director of German utility association VKU, said it was an important sign of the role of natural gas as a bridge to achieve climate goals. The EU taxonomy aims to clear up the murky world of sustainable investing by making sure all financial products make eco-friendly claims meet certain standards. Gas plants must meet the emissions limit by the year 2035 to switch to low-carbon gases.
After late night talks, the EU countries reached an agreement on climate laws.
How the law will affect investing trends is yet to be seen. The taxonomy does not prohibit investments without the green label.