What does nuclear energy mean to be green?

The debate over the European Commission’s proposal to assign the taxonomy of “green energy” to nuclear and gas divides Europe. While France promotes this change in the rating and announces the construction of new nuclear power plants, Spain and Germany are strongly opposed. The Minister for the Ecological Transition and the Demographic Challenge, Teresa Ribera, has ruled that this modification “sends the wrong signal to the financial markets”, but what would be the real scope of this modification?

The European Green Deal obliges countries to invest in ecological reforms “at least 37%” of the financing they receive from the Recovery and Resilience Facility of 672,500 million euros. In this sense, the green taxonomy seeks to guide companies and investors in their decarbonization plans, identifying activities and economic sectors that are environmentally sustainable and that contribute to mitigating climate change.

“Everything that is sustainable gets better financing in the market. The interest rates and the credits are cheaper”, indicates Ignacio Araluce, president of the Nuclear Forum, to CincoDías. Araluce warns that the European energy sector is still not capable of supplying itself only with renewable energies, and for this reason the Commission proposes nuclear energy as part of the transition, taking into account that it does not produce CO ₂ emissions. The expert adds that the European Union has not yet defined the type of investments that could be made in “transition energies”.

green finance

On the other hand, the inclusion of nuclear and gas in this taxonomy adds a layer of complexity to the regulation on green finance in Europe, and generates, for example, questions about the possibility that the institutions involved in nuclear projects or gas companies that meet European Union standards can issue green bonds, a market that grew by around 50% last year and is estimated to have $452.2 billion worth of bonds issued in 2021.

In October the Commission assured that it will seek to raise up to 30% of the Next Generation EU funds, some 250,000 million euros, through the issuance of “Next Generation EU green bonds”. In this sense, the delimitation of the taxonomy could directly influence the amount of investment that these issues can capture and the sectors to which the investment can be directed. However, at the moment the community executive has not yet made a statement on the matter.

The authorities have to clarify if they will change the criteria for green investments

According to the current standard of the European Commission, as a requirement issuers must prove “alignment with the taxonomy”, in addition to offering transparency on the management of bond income and receiving verification by the European Securities and Markets Authority (ESMA). ) and external entities. In this sense, the authorities will have to clarify whether it is the ESMA that will have the last word on which “transition energy” investments are sustainable, or how these criteria would be reconfigured.

This modification could also imply changes in the European criteria on which fund managers have sustainable investments, since currently the firms receive different ratings depending on whether they consider sustainability risks when making investment decisions.

For Alicia Cantero, biologist and head of Greenpeace’s advocacy area, including nuclear power among green investments is nonsense. “This decision renders the taxonomy meaningless and turns it into a license for greenwashing. There is a danger that investment will be diverted towards nuclear and not reach truly sustainable technologies. The European Commission is ignoring the principle of no harm and the problems that waste will leave for future generations. It is a hoax” Cantero has indicated to this newspaper.

Nuclear and gas would be considered ‘transition energies’

The Spanish system still depends largely on nuclear power. In fact, according to Red Eléctrica de España, this source represented around 20.8% of the total production of the Peninsula in 2021, while all the renewables together represented around 46.6% and the rest of the non-renewables, including natural gas and coal, the remaining 32.6%.

On the other hand, in the context of the energy crisis that Europe has been going through since the end of June, the President of the European Commission has highlighted in recent months the importance of European “energy sovereignty”. This concept has been described by the authorities as protecting the region’s autonomy from the influence and pressure of its suppliers such as Russia.

In this context, Santiago Carbó, director of financial studies at the Funcas Foundation and World Bank consultant, told Cinco Días that nuclear energy offers an alternative to energy imports: “The debate on waste is difficult, it has a sale and high political cost. The transition is going to take time and resources. Now we are lucky to have Algeria as an ally for gas supply, which allows us to maintain the energy system, but what would happen if not?

OTHER GREAT DRIVERS OF NUCLEAR

• China. It plans to build up to 150 nuclear reactors in the next 15 years with an estimated investment of 440,000 million dollars (about 381,000 million euros). More than the rest of the world in the last three decades. The goal of the Asian giant, which already has some 51 nuclear reactors, is to expand its installed nuclear power capacity from 10% of total supply to 15% by 2050.
• India. The giant has stated that by 2024 it will have nine nuclear reactors plus an additional 12 new ones, with a capacity of 9,000 MW. Currently it already has 22 reactors in operation and is exploring 5 new locations for possible new projects.
• Japan. One of the campaign promises of his new prime minister, Fumio Kishida, was to revive nuclear energy. It is focused on extending the life of the 33 reactors it currently has. Under current regulations, 15 of these reactors will close in December 2030 and the rest will not be closed before 2050.
• France and the Netherlands. Emmanuel Macron has announced the construction of up to 14 new reactors. On the other hand, the Dutch government announced in December the construction of two nuclear power plants in an attempt to achieve climate goals.

Source: Five Days