Taxonomy is a bit like sauerkraut, a thoroughly quaint Alsatian dish: everything depends on the choice of ingredients. And MEPs will have to decide next week what the taxonomy should consist of, this financial instrument that aims to classify economic activities according to their positive impact on the environment and the climate. In doing so, they will vote for or against the European Commission’s Delegated Act, which proposes to include fossil gas and nuclear energy in the classification of sustainable investments. In its argumentation, the EU executive considers gas and nuclear power as transitional fuels on the way to a climate-neutral Europe.
It is an understatement to say that the proposal has caused an outcry among environmental organizations and among a number of EU parliamentarians. First, because the procedure chosen, the delegated act, de facto precludes negotiations: quite a few MEPs felt blindsided by the Commission. Second, because the credibility of the instrument is at stake if it gives the green seal to an energy source that feeds the war in Ukraine.
The Ukrainian ambassador to Germany, Andrij Melnyk, has recognized the explosive nature of the situation. In a letter to German MEP Viola von Cramon (Greens), he calls on the European Parliament to reject the second Delegated Act, referring to the “security significance” of the vote. The current proposal would promote the construction of gas-fired power plants, while LNG terminals would be considered ineligible – Russian gas would accordingly be “clearly favored.” This would be a “fatal signal” amid Russia’s war of aggression against Ukraine, the letter says.
Formally, the European Parliament and the Council have until July 11 to decide whether or not to veto the Commission’s proposal. In the Council, it is virtually certain that the member states will give the green light.
No in plenum unlikely
In France, for example, the money that can be generated by applying the taxonomy is essential to realize France’s nuclear ambitions. EDF is already heavily in debt and needs to invest €100 billion between 2014 and 2030 in its “Grand Carénage” program, which aims to extend the life of its power plants. Its plans for new EPR reactors, which are not quite ready yet, could cost between €52 and €64 billion. Gas, in turn, finds its supporters mainly in Germany.
On the other hand, on the side of the EU parliamentarians, the situation is not so clear. As a reminder, if an absolute majority of at least 353 MEPs rejects the proposal, the Commission must withdraw or amend it.
So what are the chances that MEPs will overturn the highly controversial piece of legislation? The word on the street suggests that a large number of MEPs are still undecided. On June 14, the European Parliament’s Envi and Econ committees rejected the Commission’s proposal by 76 votes to 62, with 4 abstentions. In doing so, the MEPs supported a resolution represented by MEPs from five different political groups (EPP, Renew, S&D, Greens and Left).
However, Pascal Canfin, the influential chairman of the Environment Committee, thinks a no vote in plenary is unlikely. And for two reasons: opponents of the two controversial energies would have to achieve an absolute majority, while committee votes would require only a simple one. “Anyone who is not present is at the expense of achieving a majority,” the Renew MEP said. In addition the Eastern European countries that favored both energies are much more represented in the plenary than in the two committees. “The balance is very different.”