In the wake of Europe’s energy crisis, the European Union (EU) is considering classification of nuclear power and natural gas plants as green investments; if approved, the draft proposal could help unleash a wave of investment.
The European Commission has begun consultations with EU countries on common definitions of “sustainable investment.” Any final plan would be subject to approval by a majority of member states or the European Parliament, and it could take years before the E.U.’s rule book actually comes into force.
Under the proposal, nuclear power and natural gas would have to meet the following criteria to be classified as sustainable energy sources.
The European Union has been working to make sustainability and climate considerations an integral part of its financial rules to support the Green Deal to make Europe a net-zero emitter of greenhouse gases by 2050.
EU member countries have been engaged in lively debates on the role of nuclear power generation.
France led a coalition with Eastern European nations — the continent’s most coal-dependent region — to get nuclear energy and natural gas classified as sustainable investments. Poland, Hungary, Bulgaria, and Romania want investment for nuclear power to transition from fossil fuels.
In contrast, Germany, Austria, Luxembourg, Portugal, and Denmark have expressed concerns about a buildup of nuclear power plants and their radioactive waste.
German government spokesman Steffen Hebestreit said Germany considers nuclear power “to be dangerous”. Germany has already rejected the proposal to include nuclear energy in the bloc’s climate-focused plans and investments and is shuttering it’s three remaining nuclear plants, turning to natural gas instead.
Hebestreit added that “For the German government, natural gas is an important bridging technology on the way to greenhouse gas neutrality against the background of the phase-out of nuclear energy and coal-fired power generation.”
Including nuclear power and natural gas in Europe’s sustainable investment rules could have significant implications.
In Europe, it would enable billions of euros in state aid for nuclear energy projects and make investment capital available. Banks and pension managers offering ESG investments could include nuclear energy companies and natural gas in sustainable investment funds for clients.
There is no denying the potential of nuclear power given its ability to generate clean energy, but huge construction costs and timelines, public safety concerns, and disposal of radioactive waste remain massive problems.
A number of companies, from Rolls-Royce to Westinghouse, are working on factory-built, site-assembled models costing a fraction of traditional behemoth nuclear plants.
“That’s a massively different economic proposition,” said Marisa Drew, the head of sustainable investing at Credit Suisse, adding that investors were looking at small nuclear plants as a potential power source for factories, desalination facilities, or even cryptocurrency miners. While these micro-reactors are an exciting new possibility, the issue of radioactive waste persists and like other green technologies they currently lack the scale to take over for existing power sources.
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