Green Deal becomes greenwashing? Resistance to the EU taxonomy
22 February 2022
The EU's so-called Green Deal is intended to advance the greening of the financial system. Of central importance are uniform regulations that clearly define which investments may be designated as sustainable and under what conditions. The EU taxonomy should ensure that investors can be confident that they are actually investing in sustainable financial products if they are labelled as sustainable. Likewise, financial institutions should be able to be sure that they will not be accused of greenwashing. However, the positive effect that EU taxonomy should have on financial systems is being jeopardised by the current political discussion. What has happened?
After the German government finally rejected the EU Commission's proposal last January and spoke out against the inclusion of nuclear power, the EU Commission has nevertheless come out in favour: Nuclear power as well as natural gas have now been classified as "sustainable bridging technologies". Nuclear power and gas are thus included in the taxonomy for sustainable financial products, which has met with massive reservations and resistance from many. Opponents speak of "greenwashing". Besides Germany, Luxembourg and Austria had also campaigned against the eco-label for nuclear power. However, this did not bring about major changes. Since the taxonomy is a "delegated act" and not a normal EU law, the EU Commission is in a position to "rule through".
The EU Commission defends its plans in the course of the Green Deal. EU Commissioner Mairead McGuiness is certain that the regulation will increase transparency and promote private investment. She also stressed that national energy policies would remain unaffected by the taxonomy and that EU member states would be free to decide for or against a certain technology. She rejected the accusations of greenwashing: the use of nuclear and gas is subject to strict conditions, which is why there can be no talk of greenwashing.
But the criticism continues. The Commission continues to meet with resistance in the European Parliament. The Greens in the Parliament speak of "fraudulent labelling", which would be at the expense of the energy transition and investors. The SDP is also against the taxonomy. However, preventing the taxonomy does not seem to be feasible. A simple majority is not enough to stop a "delegated act". At least 20 EU states have to vote against it, which is considered unattainable.
Protests against the classification of nuclear energy and gas as climate-friendly also increased. The Austrian Minister for Climate Protection, Leonore Gewessler, explained at a press conference in Vienna that her ministry would "prepare all legal steps" in the coming weeks and, if the taxonomy enters into force, would "take action against it with an action for annulment at the European Court of Justice". The lawsuit could delay the implementation of the taxonomy - the EU Commission, however, considers its draft to be legally sound. The taxonomy, including the seal of approval for nuclear and gas, is to come into force in 2023 at the latest.