EU lawmakers refuse to backtrack on nuclear, gas in bonds

The nuclear Belgian power plant of Tihange near Huy shown on 6 May
The nuclear Belgian power plant of Tihange near Huy shown on 6 May

Photo credit: AFP

EU lawmakers have abandoned plans to shelve nuclear and gas power from the green bond standard regulation amid widespread opposition.

Members of the European Parliament’s economy committee failed to build enough support for an amendment that would have excluded the two controversial technologies from the rules, according to an email seen by Bloomberg sent by the lawmaker in charge of the file Paul Tang to lawmakers.

The EU’s green bond standard is part of the bloc’s efforts to combat the practice of “greenwashing,” where the environmental credentials of an asset or company are misrepresented or overstated. The taxonomy, which kicked into action at the start of the year, aims to outline which economic activities are in line with a climate-neutral path. 

The decision comes before a committee vote on Monday on the green bond standard regulation. Proposed changes to strengthen it would mean that all green and sustainability-linked bonds will need to come with transition plans in line with the bloc’s own 2050 net-zero targets. They also include greater transparency requirements on the whole green bond market so that EU-labeled securities can be compared with others.

Investors will be able to take legal action on issuers where failure to live up to climate commitments results in a green bond losing some of its value.

A proposal by the Commission earlier this year to include gas and nuclear in its green rulebook is currently in the hands of member states and Parliament. Tang said in the email he would now focus his efforts on getting Parliament to reject it in a vote that is due before the Summer.

Once the green bond standard passes through the economy committee on Monday, it then goes to a wider Parliament vote. Member states and lawmakers then negotiate the final shape of the legislation.

©2022 Bloomberg L.P.

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