Guest comment: The EU Commission with its taxonomy proposal obviously misleading incentives

According to Commission head Ursula von der Leyen, the European Union should become the first climate-neutral continent by 2050. The focus is on the energy supply. Our industry, our houses, trains and e-cars must be reliably supplied with green electricity in the future. But only 18 percent of the electricity that flows through the lines of the 27 member countries comes from green sources.

A look at the French community of Flamanville or the Finnish island of Olkiluoto should actually teach the head of the commission wrong. 19.1 billion euros in costs and not a single kilowatt hour of electricity – that is the interim result in France after 19 years of construction. The economic ruin is indicative of the status quo of European nuclear power.

The nuclear reactor on Olkiluoto recently went online, but 13 years later than planned. The French operating company Areva, also responsible for the disaster in Flamanville, could no longer bear the costs, the state-owned company Électricité de France had to step in. These two examples already show that nuclear power is sinfully expensive.

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Because of the associated risks, experts expect annual insurance costs of almost 72 billion euros per nuclear power plant (AKW). And this energy is now to be promoted through the EU’s green taxonomy for sustainable financial investments. What madness!

The EU Commission is setting false incentives

Banks, investment funds, private investors, but also public financial institutions and taxpayers’ money should orientate themselves towards the taxonomy if they want to invest in the EU energy transition.

Instead of directing private and public investments into renewable energies, the EU Commission is obviously creating false incentives with its proposal. Two examples may illustrate this:

  • First, the EU standard for green bonds will be based on taxonomy. Billions can then flow into new or old nuclear power plants in the future – but only France’s ailing nuclear industry will benefit from this. There are currently 15 of 56 nuclear power plants completely disconnected from the grid due to malfunctions or maintenance work. European tax money and private investments should now close the gaps in the French electricity supply. Instead of getting nuclear power plant operators and states to insure the risks resulting from nuclear energy in sufficient amounts, they should at least in part be borne by the taxpayers.
  • Second, the European Union’s Corona Reconstruction Fund, amounting to a good 750 billion euros, works according to the do-no-harm principle, so all investments from the fund must not cause any serious long-term damage to people or the environment. Nevertheless, according to the green taxonomy proposed by the EU Commission, investments from the largest money pot ever in the EU can now flow into nuclear power and natural gas. The EU Commission itself admits that uranium mining causes immense environmental damage and thus clearly violates the do-no-harm principle.

This puts the international community’s sustainability label in massive danger for a green energy transition – because investments in nuclear power and natural gas should receive the same sustainability label as the construction of wind turbines and solar systems.

Money locks for natural gas are opened

Not only would investors be deceived, there was also a lack of money for wind and solar systems. Money that, according to the new report by the International Energy Agency (IEA), is urgently needed so that the European Union actually becomes climate-neutral by 2050.

In addition, the 1.5-degree climate target would also be jeopardized, i.e. the target to which the EU committed itself in the 2015 Paris Climate Agreement. In its report, the IEA clearly shows: From this year onwards, no more money will be allowed to flow into fossil fuel infrastructures if we want to meet the climate target.

With von der Leyen’s taxonomy proposal, however, this goal is abandoned because the money locks for natural gas would be opened. Incidentally, this is not just about climate-damaging methane that escapes during natural gas transport. It is also about our energy dependence on Russia – and last but not least about the foreign currency with which President Vladimir Putin finances the military build-up and the deployment of troops on the Ukrainian border.

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Let’s not fool ourselves. The Nord Stream 2 natural gas pipeline has already cost Germany a great deal of political capital from our European allies. Sure, we can’t do without natural gas at the moment, it is still needed for our capacities and base loads. But proclaiming a new gas renaissance cannot be our goal.

In addition, von der Leyen must be accused of having sent her “delegated taxonomy act” to the EU member states immediately before the New Year without prior debate by the EU Parliament – apparently deliberately in the slipstream of the public. That already seems quite opaque – with a sustainability label that is expressly intended to ensure transparency on the financial market.

The document cannot be officially discussed

For the coming weeks, the debate will now take place in the back rooms of the Commission. Those who officially received the document with the proposal are not allowed to talk about it. The document itself is classified with a level of secrecy. It can therefore not be discussed officially at all.

A transparent democratic debate about Europe’s most important lever for green restructuring looks different. Directional decisions belong in parliaments, not in the back rooms. Therefore, von der Leyen has to approve the document and thus enable a public debate. The hurdles to change the proposal are high, so at least 353 members of the European Parliament would have to object to the draft. Criticism of von der Leyen’s plans is becoming noticeably louder among parliamentarians.

With Germany, Spain, Italy, Austria, Luxembourg and Denmark, more and more states are expressing criticism of their campaign gift for French President Emmanuel Macron. Ursula von der Leyen still has the opportunity to end her wrong way.

The authors: Michael Bloss is climate policy spokesman for the Greens in the European Parliament. Rasmus Andresen is spokesman for the German Green MEPs.

More: The EU taxonomy is Habeck’s test.

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