Court rules Europe can call nuclear and natural gas sustainable investments for its green transition

The Bugey nuclear plant operates in Saint-Vulbas, around Lyon, central France, Oct. 13, 2022. (AP Photo/Laurent Cipriani)

Nuclear energy and natural gas will still be considered environmentally sustainable investments in the European Union following a court ruling Wednesday, potentially driving massive amounts of financing toward projects that are not widely considered “green.”

Austria had sued the European Commission, the bloc’s executive, over the inclusion of gas and nuclear in the EU’s classification system for environmentally sustainable economic activities. The system helps direct investments to the projects that are most needed to cut planet-warming greenhouse gas emissions.

The General Court at the European Court of Justice on Thursday ruled in favor of the commission, dismissing Austria’s action.

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Nuclear power is a carbon-free source of electricity but it is not typically labeled as green energy, like solar, wind and other renewables. Generating power this way requires mining and processing uranium to create nuclear fuel, an energy-intensive process that produces emissions.

Nuclear reactors generate radioactive waste and there’s a risk of accidents. Natural, or fossil, gas has lower carbon emissions than coal, but it still warms the planet when burned to produce electricity.

The commission said that the court confirmed the legality of the way the sustainability criteria were set. European companies are increasingly using the classification system to plan their green investments totaling hundreds of billions of euros, according to the commission.

The European Union aims to be “climate-neutral” by 2050, an economy where the amount of greenhouse gases produced is no more than the amount removed from the atmosphere. The European Parliament and the Council of the European Union established a framework in 2020 to direct investment in ways that help mitigate or adapt to climate change.

In 2022, the European Commission adopted a regulation to include certain activities in the nuclear energy and fossil gas sectors, as transitional ways to accelerate progress to climate neutrality. It was an acknowledgement of how countries have different energy mixes and were at different starting points in deploying renewables at scale.

Austria sought to have that regulation annulled. Leonore Gewessler filed the suit in 2022 while serving as Austria’s environment minister because she said the regulation was “opening the door to the greenwashing of climate-harming and dangerous technologies.” Austria does not have any operational nuclear power plants.

Luxembourg supported Austria’s case. The commission was supported by Bulgaria, the Czech Republic, France, Hungary, Poland, Romania, Slovenia, Slovakia and Finland.

The court found that the commission did not exceed its authority by including nuclear energy and gas. The court endorsed the view that economic activities in the nuclear energy and gas sectors can, under certain conditions, contribute substantially to climate change mitigation and adaptation.

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The Brussels-based trade association for the nuclear energy industry in Europe, “nucleareurope,” said being in the taxonomy can help encourage private investments in nuclear projects.

Now the parliamentary leader of the Austrian Greens, Gewessler called on the Austrian government to appeal. She said an enormous amount of funding is at stake, which should go into safe renewables, not into risky and costly reactors.

“This ruling sends a disastrous signal to the entire EU,” Gewessler said in a statement Wednesday. “If this decision stands, it undermines a fundamental principle: where it says green, it is no longer truly green. Those seeking green investments may end up supporting nuclear power or dirty gas.”

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Jennifer Mcdermott, The Associated Press

AP writer Sam McNeil contributed to this report from Brussels.