Germany, on the other side, along with Austria, Luxembourg, Portugal and Denmark have expressed concerns about a buildup of nuclear power plants and the radioactive waste they produce.
“Different visions of low-carbon transition made it up to the political agenda,” said Alexander Lehmann, head of the Sustainable World Academy at Frankfurt School of Finance and Management. “The costs of the transition begin to sink in on people, so diametrically opposed energy policies have become clearer,” he said. “It has brought key oppositions out in the open.”
Including nuclear and gas energy in Europe’s sustainable investment rule book — known as a green taxonomy — could have significant implications at home and abroad.
In Europe, it would unlock billions of euros in state aid for expensive nuclear energy projects. Banks and pension managers offering investments supporting environmental, social and governance causes — known as ESG funds — would find it easier to include nuclear energy companies and natural gas in sustainable investment funds that they offer to or invest in for clients.
“By and large, nuclear was not considered to be ESG-friendly,” said Marisa Drew, the head of sustainable investing at Credit Suisse. E.U. approval, however, would open up “a potentially big wave of investment dollars,” she said. “Trillions of ESG money could find its way in this direction,” she added.
Sandrine Dixson-Declève, a co-president of the Club of Rome and a member of the panel that advised the European Commission on nuclear and natural gas, said that neither power source could be considered green.
The advisory body, known as the European Commission Advisory Platform on Sustainable Finance, concluded earlier this year that nuclear power plants posed risks of “significant harm” to the environment because of the radioactive waste they generate and concerns over the safety of storing it, she said.
