EU plan to label gas and nuclear as green could mislead investors, say advisers, Auto News, ET Auto

The EU taxonomy would not prohibit investments in assets without a green label. But by labeling climate-friendly investments as green, it aims to make them more attractive to investors.

The European Union’s draft plan to label gas and nuclear power plants as green investments risks creating confusion and misleading financial information, expert advisers to the bloc have said amid criticism of the proposal from some lawmakers and nations.

In comments to be released on Monday, experts urged EU authorities to rewrite the draft rules, which they say would qualify gas-fired power plants with relatively high CO2 emissions as sustainable, as well as new nuclear power plants launched too late to help reach the bloc’s 2050s. climate goal.

The specialist advisers, whose opinions were reported in a leaked draft on Friday, said the proposal would make it difficult for investors to assess which investments are truly climate-friendly – the question that the “sustainable finance taxonomy” of the EU was designed to provide a clear answer on.

“The implication is that the market will not be able to interpret which investments are truly aligned with climate goals and which are not,” Nathan Fabian, chairman of the expert advisory group, told Reuters. “This would lead to inaccuracies in financial information.”

“You would see claims in financial products that your money is invested sustainably – but it’s in a gas plant that exceeds the European average emission level,” he added.

If the European Commission goes ahead with the draft rules, advisers said it should require companies and issuers of financial products to isolate gas and nuclear in their financial information, rather than lumping them together. other green investments like electric cars or wind power.

Stricter disclosures would be needed to avoid “greenwashing”, according to the comments.

The EU taxonomy would not prohibit investments in assets without a green label. But by labeling climate-friendly investments as green, it aims to make them more attractive to investors.

EU countries and lawmakers are at odds over whether gas and nuclear deserve a green badge. Germany rejected nuclear inclusion in a letter to the EU, while four other states publicly opposed the Commission’s proposal last week.

Meanwhile, groups representing more than 200 of the European Parliament’s 700 lawmakers have sent letters to the Commission raising their concerns. Some oppose the labeling of gas and nuclear as sustainable, some call for rules to include more gas-fired plants, and others call for public consultation on the rules.

The Commission must now publish a final proposal for the rules. A majority of lawmakers in the European Parliament or a super-majority of EU countries – 20 of the 27 member states – could veto it.

Read also :

In a rare assessment of the country’s energy sector by a major international oil company, Shell said China must act quickly this decade to stay on track to achieve carbon neutrality. China has drawn up plans to peak emissions by 2030, but has yet to reveal a detailed carbon roadmap for 2060.

It plans to reduce Scope 1 and 2 emissions intensity through the implementation of newer technologies at its Cold Lake, Alberta operation, facility efficiency improvements and use of carbon capture and storage.

Comments are closed.