Greetings and welcome to EURACTIV’s Green Brief. Below you’ll find the latest roundup of news covering energy & environment from across Europe. You can subscribe to the weekly newsletter here.

The European Union is moving closer to integrating nuclear power and natural gas in the bloc’s sustainable finance taxonomy – a set of rules designed to provide investors with a common definition of what is green and what is not in order to channel more capital into sustainable businesses.

The announcement came in a Tweet by European Commission President Ursula von der Leyen after an EU summit last week where leaders debated the taxonomy in the context of the bloc’s wider response to soaring energy prices.

“We need more renewables. They are cheaper, carbon-free and homegrown,” von der Leyen wrote.

“We also need a stable source, nuclear, and during the transition, gas. This is why we will come forward with our taxonomy proposal,” she added.

Whether to include gas and nuclear in the taxonomy has divided the EU for more than three years. In 2019, France, Britain, and other Eastern EU states threatened to veto the taxonomy regulation – the EU’s sustainable finance rulebook – over concerns that nuclear power was not explicitly included as a “green” energy source.

One year later, a group of 10 EU countries – mainly from the EU’s East and South – similarly wielded their veto over the first batch of taxonomy implementing rules because they did not include gas as a “transition” fuel.

In true European fashion, EU leaders kicked the can down the road and left the European Commission to decide via a series of implementing rules called delegated acts, drafted by a group of experts on sustainable finance.

But the EU executive has so far held up its proposal on gas and nuclear, suggesting the issue is too politically charged to be decided by experts.

Back to square one, then? No. In the meantime, two significant developments took place.

First, the European Commission’s in-house scientific body, the Joint Research Centre (JRC), issued a long-awaited report in July. It concluded that nuclear power was safe and therefore eligible for a green label under the taxonomy – a finding that two other expert groups later confirmed.

Then, the energy crisis hit. With the climate emergency coming on top, the question of securing low-carbon energy supplies in sufficient quantity and at affordable prices for consumers has become a top political concern for EU leaders.

And even though gas and nuclear cannot be considered “green” as such, they certainly provide a lower carbon alternative to coal – the dirtiest of all fossil fuels and a top priority in the fight against climate change.

At the initiative of France, representatives from like-minded EU countries held a meeting on 18 October to debate nuclear and natural gas in the context of the taxonomy. EU diplomats said the meeting discussed compromise proposals for technical criteria to assess the sustainability of gas and nuclear power plants.

Diplomats who spoke to the media at last week’s EU summit told EURACTIV that the meeting was attended by Bulgaria, Cyprus, Czechia, Finland, France, Greece, Hungary, Malta, Poland, Romania, Slovakia, and Slovenia.

The debate, it seems, has now moved on. The question is no longer whether nuclear and gas have a place in the green finance taxonomy but how they can be included in a way that helps move the green transition forward while sticking to the taxonomy’s scientific rigour and avoiding “greenwashing”.

An answer to that question possibly came last week from the EU’s financial services commissioner, Mairead McGuiness.

The EU taxonomy regulation has created three categories for sustainable investments: “green”, “enabling” and “transition”. In an interview with the FT, McGuiness said a possible compromise could be to create a new “amber” category for activities that are not “green” as such but are still helpful for the green transition. The Commission is also looking at redefining the “transition” category to prevent the taxonomy from becoming too “binary”, McGuiness said.

With the creation of a new intermediate category, and the definition of clear sustainability thresholds for nuclear and gas, the European Union may just have found the answer to a question that has been bogging down the taxonomy for years.

Some will denounce it as a fudge and an assault on the EU’s green objectives. Others will call it a pragmatic answer to one of the trickiest questions posed by the energy transition.

– Frédéric Simon

This week’s top stories

• EU avoiding ‘rash decisions’ on energy price rises
• World faces disastrous 2.7C temperature rise on current climate plans, UN warns
• Deforestation continues unabated ahead of COP26
• Eastern countries win carbon market ‘study’ at EU summit
• EU summit to pass on energy ‘hot potato’ to ministers

More stories

• Climate scientist: On forestry, COP26 must avoid double counting of carbon removals
• Nine EU countries reject Franco-Spanish push for electricity reforms
• Green mortgages to help EU achieve climate goals
• Rich nations urged to take ‘holistic’ approach to forestry in trade deals
• ‘Closed-loop’ technology brings promise of geothermal anywhere
• Greenhouse gas levels hit record; world struggles to curb damage
• Modi confirms COP26 attendance in boost to summit
• ‘Sun beneath our feet’: The European cities turning to geothermal
• Russia says Putin won’t fly to Glasgow, in blow for climate talks
• Hedge fund billionaire calls for higher capital requirements for fossil fuel financing
• Europe’s gas supply squeeze engineered by Russia, Poland says

Luxembourg Latest: There and back again. Representatives from EU countries met once more in Luxembourg to discuss the soaring energy prices. Was any progress made? Well, it depends what you had riding on the meeting. Certainly, nothing truly ground-breaking occurred. There was no agreement on EU level measures – as the Slovenian minister Jernej Vrtovec said both before and after the meeting.

However, if you’re looking for a clarification of the different positions of European countries, you’re in luck. The meeting revealed the different factions emerging. Here’s a quick overview:

1) Ride It Out Crew: Nine European countries have rallied behind the current energy market setup and are defending it from attacks from other countries. They argue that support must be given to the most vulnerable during the crisis and that renewable energy and interconnection will save us in the long run. On this frontier stands Austria, Denmark, Germany, Estonia, Finland, Ireland, Luxembourg, Latvia and the Netherlands. Sweden and Belgium have similar positions, according to Luxembourg minister Claude Turmes, but their signatures are suspiciously absent from the joint paper.

2) Reformists: France and Spain are pushing hard for reform of the energy market, with Spain arguing that there is a ‘contagion effect’ whereby high gas prices infect energy prices (because who doesn’t love a virus metaphor after nearly two years of living through a pandemic?) In a non-paper on energy markets, Spain called for decoupling gas prices from electricity prices and capping the price of bids from electricity produced from natural gas.

3) Shopaholics: Several EU countries are talking about joint procurement of gas – or, as Spain puts it, a “centralised European platform to purchase natural gas, facilitating the build-up of strategic gas reserves”. The European Commission is still gauging the level of support in EU countries for this – it was on the plate for discussion over lunch on Tuesday. With the gas market reform due in December, there could be the opportunity to sneak something in. Ireland would be open to this, providing it remained voluntary, Minister Ossian Smyth told EURACTIV.

4) Opportunists: Many central and eastern European countries – those heavily reliant on coal and looking at the highest cost to reach green energy mixes – are using the high energy prices as a chance to attack Europe’s Green Deal. This is particularly the case with Poland and Hungary, meanwhile the Czech Republic made a surprise bid to attack the EU’s carbon market at last week’s EU summit. The issue is that the European Commission is waiting on several studies to come back, including on market manipulation (particularly by Russia). Until they have these, the Commission line is that the ETS has a minor impact and to wait for the studies. All I can say is it’s easier to attack something when there’s no defence.

5) Taxonomy Traders. Anyone remember that little bit of gossip we reported on back in April where Luxembourg minister Claude Turmes said some in the French government argue that throwing their weight behind gas could open the door for other countries to back the inclusion of nuclear in the taxonomy? Well, we’re not saying that’s exactly what happened, but nuclear and gas seem to be a fine pairing now, with many countries calling for them to be included in the next edition of the sustainable finance taxonomy. This would allow them to access some investments – gas probably less so as it would have a lower ranking and only be seen as a transitional technology – by being seen as sustainable. Both Austria Luxembourg pushed back hard on the idea of nuclear technology to save Europe from the energy crisis, but it’s yet to be seen if they can hold back the tide of pro-nuclear countries. We’re expecting the delegated act by the end of the year.

So, many questions yet to be answered, many studies yet to be completed and one taxonomy delegated act we’re waiting for with baited breath. Who’s ready for energy prices to be back on the agenda for both the Energy Council and European Council summit in December? 

– Kira Taylor

News from the capitals

DUBLIN. Irish climate council proposes carbon budgets for next decade. Ireland’s Climate Change Advisory Council (CCAC) has unveiled two five-year carbon budgets with the overall aim of reducing the country’s carbon emissions by 51% by 2030. Read more.

PARIS. New report examines six scenarios for achieving carbon neutrality by 2050. The French electricity transmission system operator (RTE) presented on Monday (25 October) six scenarios for achieving carbon neutrality by 2050. The experts also took into account the security of supply of the French electricity system. Read more.

PRAGUE. Future Czech government calls for dialogue in Turów case. Czech authorities have asked Poland to come back to the negotiating table and finally solve the Turów mine issue. “The continuation of negotiations is in the interest of all parties, particularly of the Liberec region,” Deputy Environment Minister Vladislav Smrž told EURACTIV.cz’s media partner Aktuálně.cz. Read more.

BELGRADE. Serbia to participate in international nuclear accident simulation in UAE. Serbia will participate in an international exercise to test response to a severe accident simulated at the United Arab Emirates Barakah nuclear power plant from Tuesday to Wednesday, the Directorate for Radiation and Nuclear Safety reported on Monday. The International Atomic Energy Agency (IAEA) and the UAE are conducting the exercise. Serbia will use the exercise to test for the first time a decision support system, JRodos, able to estimate the possible location of a radioactive cloud, evaluate the impact of a nuclear accident on the population and the environment, and assess the efficiency of protection measures, the Directorate said in a release. (EURACTIV.rs | betabriefing)

BERLIN. German ministry: Nord Stream 2 not a supply security issue. The ministry of economy and energy, led by caretaker minister Peter Altmaier, has completed its long-awaited analysis of the potential impacts of certifying the Gazprom pipeline Nord Stream 2, concluding that the pipeline does “not jeopardise the security of gas supply” of Germany and the EU. Read more.

PARIS. Inflation to hit French baguette as energy and wheat prices soar. The emblematic French loaf might see its price increase by 5 to 10 cents due to rising energy prices and this year’s difficult weather conditions in Europe, Canada, Russia, and the US, which drove wheat prices to their highest level since 2012. Read more.

BUCHAREST. Romgaz buys half of Black Sea deepwater gas project. Romanian state-run natural gas producer Romgaz says it has reached an agreement with ExxonMobil to buy its share in an offshore perimeter in the Black Sea, where significant gas discoveries have been made. Read more.

HELSINKI. Planned nuclear power plant to get risk assessment due to Russian connections. Finland’s defence ministry demands a risk assessment of a nuclear power plant planned by the power consortium headed by Fennovoima. Causing concern is that Rosatom, a Russian state nuclear company, owns 34% of the firm. Read more.

DUBLIN. Ireland’s ministers briefed on energy crisis contingency plans. Emergency plans drawn up ahead of potential winter energy shortages could see businesses given an hour to reduce their usage and homes facing having their power cut off in the worst-case scenario. Read more.

ROME. Draghi: EU must immediately work on securing strategic energy stocks. Following a two-day EU summit, Italian prime minister Mario Draghi made his position clear on how he thinks the ongoing energy crisis should be tackled on a European level. Read more.

ATHENS. Greece will never turn to nuclear energy. Prime Minister Kyriakos Mitsotakis has said Greece would never switch to nuclear power because of frequent earthquakes in the region. However, he added that Athens would not oppose others using it. Read more.

BRATISLAVA. Several Slovak cities uncertain about next year’s energy and electricity supply. Some Slovak cities have still not managed to close deals to supply gas and electricity for next year and are struggling with high prices on the wholesale market. Read more.

SKOPJE. North Macedonia is entering an energy crisis. North Macedonia consumes twice as much electricity as it produces, and to satisfy daily needs, it took electricity from the European network. Read more.

PRAGUE. Babiš loses ‘suspicious’ battle against ETS system. Czech Prime Minister Andrej Babiš – backed by his Hungarian counterpart Viktor Orbán – blocked the EU Council’s conclusions from Thursday until late evening. His controversial business with Agrofert could be the reason behind it, EURACTIV.cz has learnt. Read more.

LISBON. Portugal to cap fuel prices from Friday. A law that allows the government to limit margins in the marketing of fuels, published on Thursday, will come into force on Friday (22 October). Read more

SOFIA. Bulgaria to compensate companies for expensive energy. Bulgarian companies will receive compensation of €55/MWh due to the high cost of electricity from the middle of next month, the Bulgarian caretaker government has announced. The money will come from the profits of the Kozloduy nuclear power plant, which will subsidise Bulgarian business by €225 million. Read more.

MADRID. Spain to ask for decisive action from the EU to curb energy prices. Spain’s Prime Minister, Pedro Sánchez is expected to ask the EU to be “more ambitious” and adopt new measures to curb the tremendous rise in energy prices in Europe, during the summit on Thursday in Brussels. Read more.

Spain also recorded highest inflation since 2008. Spanish inflation rose to a record 4% in September, the highest level since 2008, mainly due to increased electricity prices, the Spanish Statistical Institute (INE) reported. Read more.

LISBON. Portuguese PM calls on EU to review the way energy prices are set. Portugal’s prime minister, António Costa, on Wednesday called for a review of the mechanism for setting energy prices in the European Union, which he said harm Portugal, and for short-term measures to address the current crisis, without jeopardising environmental goals. Read more.

PRAGUE. Czech government waives VAT for electricity and gas. The Czech government approved on Wednesday (20 October) zero VAT on electricity and gas for the upcoming year. It is expected to come into force on 1 January 2022. Moreover, if the Czech parliament gives consent, a zero VAT rate will also be applied for November and December 2021. The current VAT rate on energy is 21%. Read more.

ZAGREB | LJUBLJANA. Slovenian-Croatian commission pleased with operation of Krško nuclear power plant. The intergovernmental commission on the Krško nuclear power plant, co-owned by Slovenia and Croatia, on Wednesday expressed its satisfaction with the plant’s operation and discussed the programme and financial aspects of its work. Read more.

News in brief

CBAM may be needed to achieve net zero, report says. The EU’s planned carbon tariff, although controversial and fraught with practical implementation issues, might just be what Europe needs to achieve net zero emissions, argues a new report by the University of Cambridge Institute for Sustainability Leadership (CISL) and Cambridge Econometric. The report, published on Monday (25 October), finds that the EU’s proposed Carbon Border Adjustment Mechanism (CBAM) could lead to a small increase in EU GDP of 0.2% by 2030 and 0.4% by 2050, while creating an additional 600,000 jobs in the EU. 

Importantly, the report shows that CBAM could also lead to a modest reduction in CO2 emissions globally, as foreign countries introduce more ambitious climate policies in response to the EU proposal. The study also underlines “the crucial importance of CBAM as a means of enabling more ambitious domestic climate policy and improving the political acceptability of high carbon prices” among the European industries covered by the plan. “Ultimately, the report says that CBAM may be needed for the EU to achieve net zero by 2050,” a statement said. An embargoed version of the report can be downloaded here. (Frédéric Simon | EURACTIV.com)

Opinions

• Gas prices: keep calm and renovate buildings – By Brook Riley
• Why the EU’s 8th environmental action programme matters – By Rebecca Humphries 
• Europe’s winter of discontent: The cost of sluggish energy transition – By Timur Tillyaev
• Nothing is more blah-blah-blah than the EU’s ‘sustainable’ trade policy – By Adélaïde Charlier and Deborah Osei-Mensah

Upcoming events

9 NOVEMBER. Working towards a stronger circular economy – how much regulation is needed? Come along to discuss the EU’s Circular Economy Action Plan and whether its new initiatives, such as the digital product passport, will achieve the transparency for products that policymakers are looking for. Speakers include William Neale, advisor for circular economy at the European Commission, Joan Marc Simon, executive director of Zero Waste Europe, Emma Watkins, senior policy analyst for low carbon and circular economy at IEEP and Karl Haeusgen, president of VDMA. Programme and registration here. (Supported by VDMA)

15 NOVEMBER. The role of electrolytic hydrogen in the clean energy transition. Join this EURACTIV Virtual Conference to discuss what role low carbon electrolytic hydrogen can play in achieving net zero emissions in the EU by 2050. There are still many open questions about definitions, which form of hydrogen will be supported and where research and development will be focused. Confirmed panelists include Christelle Rouillé, the CEO of French startup Hynamics, and Christian Egenhofer from the Centre for European Policy Studies (CEPS). (Supported by EDF) 

8 DECEMBER. Energy poverty: how to reduce inequalities? Join Adela Tesarova, Head of Unit, Consumers, Local Initiatives and Just Transition, DG Energy, European Commission, Masha Smirnova, Campaign Manager European Green Deal, EUROCITIES and more  to discuss how addressing energy poverty can help reduce inequalities in the European Union and the role that Member States should play in protecting vulnerable citizens. Programme and registration here. (Supported by PKEE)

On our radar

31 OCTOBER – 12 NOVEMBER: COP26. Global leaders will meet in Glasgow, UK, with more ambitious climate pledges and with the aim to finish negotiations around Article 6 of the Paris Agreement.

17 NOVEMBER: Deforestation and waste shipment proposals. The European Commission will propose its revision to the waste shipment regulation and a proposal on minimising the risk of imported deforestation.

2 DECEMBER: Energy Council. EU energy ministers will meet in early December in the second session since the Fit for 55 package was tabled. (meeting page). 

14 DECEMBER: Energy, climate, transport and nature protection package. Following the publication of its huge package of climate proposals in July, the European Commission is expected to table more energy-related files, including regulations on natural gas, and proposals on the circular economy. It will also put forward proposals on nature protection. See the full list here:

Climate and energy:

• Reducing methane emissions in the energy sector
• Revision of the third energy package for gas
• Revision of the energy performance of Buildings Directive
• Commission communication: Restoring sustainable carbon cycles
• Council Recommendation to address the social and labour aspects of the climate transition

Efficient and green mobility package:

• Revision of the Regulation on the trans-European transport network
• Revision of the Directive on Intelligent Transport Systems
• New EU urban mobility framework
• Rail freight corridors initiative

Nature:

• Protecting biodiversity: nature restoration targets
• Improving environmental protection through criminal law

16-17 DECEMBER. EUROPEAN COUNCIL. EU leaders will meet once again and energy prices are back on the agenda. This time, however, it will be after the gas package has been tabled.

Read more with Euractiv

EU avoiding 'rash decisions' on energy price rises

The impact of surging gas and electricity prices globally threatens the EU's energy market, but the bloc will not react hastily, officials said on Tuesday (26 October).