The EU Taxonomy for sustainable activities (EU Taxonomy) became law in July 2020, but the law left several decisions to be finalized in “delegated acts.” These decisions required additional technical evaluation. The treatment of nuclear energy was one of those technical issues. On December 31, 2021, a draft delegated act was published that recognized that nuclear energy could make a substantial contribution to the reduction of CO2 emissions.
In other words, nuclear energy is considered a sustainable, “green” investment. There are some conditions that are still being debated.
Producing that draft required extensive work, active collaboration, a detailed technical report produced by the Joint Research Centre and expert reviews by two special committees (Group of Experts on radiation protection and waste management under Article 31 of the Euratom Treaty and the Scientific Committee on Health, Environmental and Emerging Risks (SCHEER))
Politically paired with natural gas
As a result of intensive politicking and compromise, the delegated act also includes provisions for the inclusion of natural gas in the EU Taxonomy. Both nuclear energy and natural gas are recognized as useful tools, but both technologies must meet specific conditions and restrictions to be considered “sustainable.”
Including natural gas sounds like a cop-out to many climate activists, but it is part of a political compromise seen as necessary to avoid German rejection of the delegated act. Replacing coal with natural gas might be a reasonable step forward for the climate, but it risks deepening European energy dependence on Russia. That’s not one of the considerations influencing the EU Taxonomy.
Fewer opposing countries than supporting countries
Many articles on this subject give the impression that there is a balance between the countries that oppose nuclear and those who want it to be recognized for its obvious attributes. Those articles usually list Germany as leading a group of opponents and France leading a group of supporters. Most of those articles name two or three countries in each camp.
There are five EU members that strong oppose nuclear’s inclusion (Germany, Austria, Denmark, Luxembourg and Spain) while there are at least 10 who have formally expressed their support to the European Commission in a letter sent in mid December 2021 (France, Bulgaria, Croatia, Czech Republic, Finland, Hungary, Poland, Slovakia, Slovenia and Romania). After that letter was sent, the Netherlands announced that their CO2 reduction plans would include a major reliance on nuclear power.
Opposition not giving up
It should be no surprise to any reader to learn that there has been a loud reaction to the release of the draft report. There are many who are professionally and ideologically opposed to any policy that includes both nuclear energy and natural gas as technologies that are eligible for “green” investments.
Opponents don’t like the idea that their hated technologies might obtain lower cost finance from banks and other institutions. They know there is a deepening pool of money seeking activities that meet ESG (environmental, social and governance) criteria.
According to data acquired by Finbold, sovereign wealth fund investments in the ESG space surged 215.27% between 2020 and 2021 from $7.2 billion to $22.7 billion. Over the same period, the number of deals increased from 19 to 37. In 2019, the investment stood at $5.2 billion. The investments remained relatively low over the last six years before 2021’s spike, with 2016 registering the lowest value at $3.7 billionFinbold: Sovereign wealth funds ESG investments surge by over 200% in 2021
Nuclear energy opponents recognize that ESG classification systems are likely to follow the EU’s lead in considering nuclear energy to be an environmentally sound technology.
One of the principle remaining argument against nuclear energy is that it costs too much and takes too long for projects to move from planning to operation.
A decision that enables nuclear energy to attract more interest from financial institutions will both reduce cost and reduce the time and effort required to arrange sufficient financing. This will improve cost and schedule performance for all projects that can meet the specified criteria.
These criteria include a plan to store used fuel, a plan to set aside money for waste handling and decommissioning and the use of best available technology. These criteria are under discussion because they have the potential to reduce the attractiveness of nuclear investments even if nuclear is classified as green under the taxonomy.
Berlin may not strenuously oppose the nuclear regulation because it is not clear that it will actually encourage significant nuclear power investments. That’s because the proposal includes criteria for nuclear waste management that are a potential roadblock. For both newly built reactors and operating lifetime extensions for existing ones
Foreign Policy Jan 13, 2022: Amid Energy Crisis, EU Fights Over Whether Nuclear Is Greenhttps://foreignpolicy.com/2022/01/13/nuclear-energy-green-europe-eu-climate/
One of the more frequently heard arguments against including nuclear in the EU taxonomy is that its presence will crowd out renewable energy investments. If the pool of available money is limited, adding a new competitor will reduce the funds that can support all other competitors.
This argument, however, is fundamentally a business argument that ignores the shared goals of reducing CO2 and reducing dependence on fossil fuels. It also ignores the very real possibility that including nuclear in the taxonomy will attract large amounts of new money to the clean energy investment world.
Benefits of intense discussion
The epic political battle over nuclear energy’s inclusion in the EU Taxonomy is likely to produce unexpected positive results. Instead of being ignored and “damned with faint praise” nuclear energy has been lavished with attention from both sides of the conflict.
Traditional nuclear industry leaders would strongly disagree with Oscar Wilde’s famous quote: “There is only one thing in life worse than being talked about, and that is not being talked about.” But being ignored and left out of routine conversations has not done nuclear technology any favors during the past 30 years.
Many of the positive statements from nuclear supporters have been science-based arguments using credible sources like the UN Economic Commission for Europe’s recent Life Cycle Assessment report to prove that the life cycle emissions from nuclear power production are slightly less than wind and substantially less than solar. In contrast, nuclear opponents have made sweeping statements about safety or waste that are not supported by nuclear energy’s documented track record.
The most concrete reasons for keeping nuclear energy tools in a box during the battle against climate change are excessive costs and repeatedly delayed projects. Though not simple or easy, both cost and schedule are characteristics that can be – and must be – addressed and improved.
It’s not hard to remember a time when wind and solar were far more expensive than they are today. It was less than 20 years ago. The impressive cost reductions that those technologies achieved came largely from well-established steps collectively called “learning curves” that can be adopted by nuclear project developers.
It’s true that nuclear projects have not generally followed established product trends. But it is also true that the nuclear industry has not actually tried to use learning curves and product repetition to reduce costs and schedules. Better access to more sources of capital will help alter future history.