Four EU Nations Make Last-Ditch Bid to Stop Green Label for Gas

(Bloomberg) -- The Netherlands, Austria, Sweden and Denmark made a last ditch plea to the European Commission to not grant some natural gas projects the bloc’s green label, highlighting divisions within the region over what energy sources should be favored during the transition away from fossil fuels.

“The lack of scientific evidence for including fossil gas in the Taxonomy should lead to a reconsideration of the proposal by the European Commission,” wrote energy ministers from the four countries to Commissioner Mairead McGuinness. “We call upon the European Commission to not include any fossil gas activities as sustainable in the current Taxonomy, as long as these activities are not subject to the same standards as other energy technologies.”

Europe’s unprecedented energy crisis has underscored the challenges of phasing out fossil fuels and nuclear power when renewable energy output and storage are still not enough to replace more traditional sources of energy. Gas is seen as a way of helping wean countries like Poland off coal, which pollutes much more.

The objections are unlikely to derail the Commission’s plan to provide some gas and nuclear projects a green label so long as they are approved by 2030 and 2045 respectively, and adhere to other emissions and transition criteria, such as replacing coal-fired power stations. Yet, the latest bout of criticism to the draft proposal, expected to be unveiled Wednesday, once again puts the bloc’s ambition to set the “gold standard” for environmental finance in doubt.

Once adopted, member states and the European parliament, are given a chance to reject the proposals, but the bar to do so is high. At least 20 of the EU’s 27 member states -- representing no less than 65% of the bloc’s population -- would need to unite against the plan for it to fail. Equally, a majority in Parliament could also veto the plans, though it’s unlikely that enough lawmakers will vote against it.

Last week, the Platform on Sustainable Finance, one of two groups consulted by the Commission, slammed the plans on gas saying that they could undermine the EU’s climate neutrality target by 2050. How the region would deal with the possible environmental impacts from nuclear waste was also unclear, it said. A growing body of investors and banks, including the European Investment Bank, have said they will most likely shun the technologies in portfolios.

“We would like to point out that the 1.5 degree objective and the importance of avoiding lock-in of assets incompatible with the achievement of climate neutrality are enshrined in the Taxonomy Regulation,” the ministers wrote. “The integrity and ambition of the Taxonomy should not be compromised.”

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