EU Taxonomy Labelling Gas and Nuclear as ‘Green’ Faces Legal Challenges

Austria has filed a lawsuit against the European Commission’s decision to label nuclear and gas as ‘green’ investments. The controversial EU taxonomy approved by the European Parliament in July is already facing two other legal challenges from environmental groups. 

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On Friday, Austria submitted a lawsuit to the Court of the European Union, asking for an overturn of the contentious EU taxonomy. 

Approved in July, the legal text designated natural gas and nuclear as environmentally sustainable energy sources, encouraging investments in these energy sources. Under the EU taxonomy, new nuclear and gas-fired plants built through 2030 will be recognised as a transitional energy source as long as they are used to replace dirtier fossil fuels such as oil and coal.

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The country’s minister for climate action and Green politician, Leonore Gewessler, described the EU’s decision as “irresponsible” and “unreasonable” and said it was “misleading” to consumers and investors to label gas – a fossil fuel responsible for climate change for its greenhouse gas emissions – as “green”.

However, Brussels reassured that gas and nuclear-related activities may be labeled as “green” only if they meet certain criteria.  Particularly, the legal text specifies that gas projects should only be financed if direct emissions are kept under a maximum cap and they switch to fully renewable energy by 2035. Similarly, nuclear power may be funded only in compliance with certain standards for the disposal of radioactive waste.

Activists and environmental organisations immediately opposed the decision, saying the new law discredits EU efforts to establish itself as a global leader on climate policy and only risks delaying Europe’s transition to a net-zero economy by further encouraging investments in the fossil fuel industry.

In September, Greenpeace and a separate alliance of environmental groups, including Client Earth and the World Wildlife Fund (WWF), requested a legal review of the decision. Austria’s recent lawsuit is now adding to the legal challenges the European Commission is already facing.

Despite not joining the legal action, Germany supported the country’s decision to file a lawsuit, adding that “it is good that the objections to the taxonomy regulation will now be reviewed by the courts.”

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