Energiewende and European green taxonomy : Our dear German friends are starting to seriously break our balls (5)

Nuclear and climate emergency, alert! Nuclear energy excluded from green taxonomy

European green taxonomy, what is it ?  

The European Commission is working on a green taxonomy, a kind of labeling designed to guide financial investments to the most appropriate sectors and activities to achieve Europe's climate targets, transition to a low-carbon economy and a sustainable development model. The objectives are: combating climate change, adapting to climate change, sustainable use and protecting water and marine resources, transition to a circular economy, waste prevention and recycling, combating pollution (prevention and control), protecting healthy ecosystems.

It must also not create a significant negative impact on other objectives (in English, DNSH criterion, Do No Significant Harm), comply with minimum social standards (??? given the achievements of Social Europe, it is quite worrisome !)  and comply with technical selection criteria (Yes, please!)

What's the point ? According to its proponents, this taxonomy is indicative and non-binding, "it is not a standard, nor is it a mandatory list of activities in which to invest." Well, then what's the point? In fact, it can be expected to have an impact on the definition of sustainable finance and European subsidies.

Comment 1: the fight against climate change is only one of the criteria. However, as Brice Lalonde pointed out about the EPP (French multi-year energy programme), too many priorities mean no priorities!

Comment 2: I quote : "taxonomy will include activities in sectors that have a negative impact on the environment provided that they substantially reduce their negative impacts. The purpose of taxonomy is to encourage the transition to greener ways of operating, and not just activities already recognized as green, it makes sense to include sectors that need to improve their practices. »

Translation (and this will be the fourth time this week on the theme our dear German friends are starting to break our balls): green taxonomy can be used to subsidize German coal miners who will close their plants, but not for investments in French nuclear power (upgrading historical nuclear and new nuclear)!

Warning: nuclear energy excluded from green taxonomy !

Mea maxima culpa, I'm a little late on this blog! After the vote of MEPs last March 2019 excluding nuclear energy from green taxonomy. There is an open European consultation on green taxonomy where everyone can give their opinion; finally could until Monday 16 September, but perhaps the deadline was still extended: site

https://ec.europa.eu/info/publications/sustainable-finance-teg-taxonomy_en

N.b.  The association “ les Voix du Nucléaire”, which does a wonderful job, has provided an argument in English to answer this consultation: contact them on:

https://www.voix-du-nucleaire.org/contact-2/

You can find useful references on Tristan Kamin's threads (perfect, as usual):

https://twitter.com/TristanKamin/status/1173521368937312256

Following consists of excerpts translated into French from the argument  des Voix du Nucléaire !

The context: "We started our public action a few weeks ago with an open letter to MEPs after their vote last March excluding nuclear energy from green taxonomy. We must now convince them to reconsider this decision. It is very strongly counterproductive when the fight against climate change should be the priority. If the European decision came into force, France would also be penalised in view of what nuclear power represents for its economy, its trade balance, its territorial development, its jobs and its energy independence. »

"The European Commission's (TEG) Group of Technical Experts has considered the inclusion of nuclear energy in the taxonomy of sustainable EU financing as a sustainable activity and investment. The TEG technical report published in June 2019 proposed not to use nuclear energy in the first version of taxonomy, pending further evaluation. The TEG recommends that further technical work be undertaken on the aspects of nuclear energy (Nb in particular DNSH - Do No Significant Harm - Do not cause significant damage]

Arguments :

Why nuclear power should not be excluded on the basis of the DNSM: All commercial nuclear activities in the EU (including spent fuel management) are already governed by EU and state legislation, regulations and procedures "Do No Harm" (DNSH).  On the other hand, the global scientific consensus concludes that the maintenance and expansion of nuclear energy is necessary to achieve sustainability goals, such as mitigating the effects of climate change.

General arguments in favour of nuclear power:

Nuclear power provides low-carbon, solid and affordable basic electricity that can withstand a decarbonised electricity mix in parallel with an expansion of renewable energies such as solar and wind in the European Union  Nuclear energy also has one of the lowest contributions to carbon generation throughout its life cycle - even less than solar and wind power per kWh (see IPCC report, "Climate Change 2014: Mitigation of climate change"). Excluding nuclear from access to sustainable financing risks undermining climate change mitigation scenarios and roadmaps identified as achievable and necessary by some of most credible institutions and organizations and authorised countries, including the IPCC (2018), the IEA (2019) and the European Commission (2018). All conclude that nuclear energy should continue to play a role ...

The exclusion of nuclear energy from taxonomy risks making it even more difficult to mitigate climate change by reducing funding opportunities for nuclear projects and unnecessarily increasing the cost of capital nuclear energy projects.

In May 2019, the International Energy Agency highlighted the important role that both existing and new nuclear power play in the future transition to clean energy. In the UK, National Grid published its future energy scenarios in July 2019, including a "zero path" with a nuclear capacity of 18.6 GW by 2050. The opinion of the Committee on Climate Change (CCC) to the UK Government - which led to the adoption of the "UK zero target" for 2050 - played a crucial role in identifying the need for additional energy production of 30GW-60GW by the end of the year. 2050 in the CCC's  zero path scenario.

Although the taxonomy report takes into account the contribution of nuclear energy to the fight against climate change, nuclear is not included in the current list of sustainable activities and no framework for assessing inclusion nuclear power was not provided. The inclusion of nuclear energy as a source of sustainable low-carbon and sustainable production in August 2019 should be reviewed at the next phase of the EU taxonomy review with the participation of life cycle experts nuclear power.

The consideration of all forms of low-carbon electricity generation should be the same (technological neutrality). The TEG technical report does not take into account the relative qualities of the different low-carbon electricity generation options.

In particular, the treatment of nuclear production in the TEG technical report differs from that of other technologies in terms of waste disposal and management. All forms of low-carbon electricity generation generate waste and involve an element that cannot be considered 'ecologically sustainable'. The full life cycle of electricity generation must be taken into account and compared fairly for all technologies. According to OECD statistics, nuclear power is the safest way to generate electricity. By comparison, polluting activities - such as steel and concrete manufacturing - are included in the taxonomy project, provided they operate at "unprecedented" levels. These activities were included in recognition of their crucial importance in achieving net zero and the desire to improve their environmental performance while at the same time respecting the most rigorous regulations.

The regulatory and governance requirements for the nuclear sector are subject to extremely stringent global standards for all aspects of the nuclear lifecycle, including waste management, safety. All commercial nuclear activities in the EU (including spent fuel management and final disposal) are already governed by DNSH (Do Not Significant Harm) standards in accordance with EU and Member State laws, regulations and procedures.

Need of a credible process/classification system:

"All forms of low-carbon production will be necessary for the clean energy transition and should therefore be subject to equal treatment under the 'no significant damage' (DNSH) procedure, and should therefore be treated included in taxonomy. It should be noted, for example, that photovoltaic solar panels and wind energy are not required to carry out an assessment of emissions over their life cycle, despite the lower emission threshold proposed by the European Union. It should also be noted that there is no waste metric in the "circular economy" criterion to which solar photovoltaic must comply, whereas there is a metric for wind energy. 

On the other hand, nuclear power is supposed to be excluded on the basis of waste, despite the fact that nuclear and radiological safety, through all elements of the uranium fuel cycle (including waste and decommissioning), is one of the most more regulated in the EU. EU waste management regulations set out clear requirements, which could be described as benchmarks or as the best appropriate standard (as has been done for other activities, such as aluminium and cement).

In the context of the search for "net zero", the exclusion of nuclear activities from taxonomy as a recognized and commercially viable form of low carbon production, undermines the credibility of taxonomy.

Other parts of the EU's financial mechanism recognise the need for nuclear power to achieve net zero: at the end of July, the EIB published a draft energy loan policy outlining how the EIB can help the EU cope with change climate change and the rapid abolition of fossil fuel loans. In this context, the EIB stated that: "Zero net emissions will involve a diversified portfolio of technologies, including renewable energy, but also nuclear, carbon capture and storage, the conversion of excess energy into a other energy vector, as well as bioenergy, storage and digital technologies. In this document, the EIB further states that in addition to nuclear power generation, the full nuclear fuel cycle, decommissioning and waste management are eligible as projects that meet the bank's criteria.

In addition, the European Commission is obliged to facilitate investments in the development of nuclear energy in accordance with Article 2 of the Euratom Treaty. It is essential that all regions of the EU are aligned on the safest path to net zero. This will further damage the credibility of taxonomy in the financial community if some organizations recognize the ecological nature of nuclear power, and others do not!

By creating a different set of requirements for one activity (nuclear) compared to the others, the TEG compromises its own integrity and credibility as a group of technical experts. By requiring long-term empirical evidence for nuclear waste depots, although no other evidence is required from any other sector or industry, TEG risks undermining the so-called technological neutrality of taxonomy. Significant inconsistencies in the application of the EU's principle of equal treatment in relation to the significant non-injury criterion (DNSH) in August 2019 may undermine the confidence of financiers that the definition of sustainable activity has been made rigorously, robustly and objectively.

This unequal treatment and the current exclusion of nuclear power (despite its critical role in achieving net zero emissions) could damage the reputation and credibility of taxonomy and TEG, which could limit the adoption of taxonomy and the EU's green obligation by the wider financial community.

The EU's Sustainable Financing Initiative is an important development that could significantly increase the amount of financial capital spent on sustainable activities. However, for this benefit to materialize, it is important that the financial community largely adopts the EU taxonomy and the European standard on green bonds, which requires financiers to be assured that the definition of an activity sustainable development is developed rigorously and objectively.

In the context of low-carbon electricity generation, this requires a technologically neutral approach and consistent application of DNSH criteria across low-carbon technologies. However, there are clear inconsistencies in the application of the EU's principle of equal treatment in relation to the DNSH criteria. This unequal treatment of all economic activities and the current exclusion of nuclear power (despite its critical role in achieving zero net emissions) damage the reputation and credibility of taxonomy and TEG, which may limit the adoption of Taxonomy as the European standard on the green bonds of the financial community.

Taxonomy defines sustainable criteria for multiple activities in different sectors (manufacturing, agriculture, transport) based on the carbon intensity of electricity consumed in the course of their activities. This approach is inconsistent with the approach applied to the definition of sustainable activities in the electricity generation sector, where nuclear power is excluded although it is definitively (and recognized by the taxonomy project) at low Carbon.

Potential impact on hydrogen-based and electrointensive technologies.

The TEG report states (pages 50, 186 and 205 to 208) that future decarbonization projects involving (i) the use of hydrogen or (ii) the manufacture of hydrogen, will only be considered "sustainable" in relation to taxonomy if hydrogen is produced at from electricity from renewable sources.  As a result, some industries (such as aluminum, iron and steel manufacturing in countries such as France) may not be able to finance some of their decarbonisation efforts by referring to taxonomy given their heavy dependence on nuclear energy! !

In addition, the exclusion of nuclear from taxonomy risks undermining confidence that electrification in all sectors will be considered sustainable in the future …

The crucial role that electrification plays in achieving net zero means that it is vitally important that all low-carbon production is considered sustainable, and that nuclear power contributes significantly to production. low-carbon electricity today and in the future.