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The European Union’s landmark rules to classify green investments may need to accommodate natural gas, the European Commission said on Monday, as Brussels weighs a politically fraught decision on how to treat the fossil fuel.
The Commission last month published its “sustainable finance taxonomy”, a list of economic activities that can be marketed as green investments that is central to the EU plan to steer private capital into activities that will help meet climate targets.
While rules for some sectors, including transport and industry, have been agreed, Brussels delayed a decision on whether power plants fuelled by natural gas will be labelled as green, after months of lobbying from industry and EU governments.
EU financial services commissioner Mairead McGuinness told lawmakers in the European Parliament the executive will have to “look again” at how gas could be accommodated given that it could help to reduce emissions in some circumstances.
“Maybe in the situation we have today, we need to find some accommodation, so that if there is no other better option that a member state can use, that gas plays a particular role,” she said.
A decision on gas is due this year, before the climate change-related section of the taxonomy takes effect in 2022.
Brussels has mooted multiple proposals for how to address gas – including one to reject it, and another to deem some gas-fuelled heat and power plants green – but none placated EU states.
Central and eastern countries want rules that promote gas investments, to help them quit more-polluting coal. Meanwhile, some western and Nordic states say it is not credible to label a fossil fuel as green.
The EU taxonomy does not ban investments in activities not labelled as sustainable. But McGuinness said the rules cannot simply reflect today’s economy – since continuing current investment patterns would scupper the EU’s climate targets.
Nuclear power is also being reviewed separately, with the Commission awaiting two expert reports on the issue by the end of the summer.
