The General Court of the Court of Justice of the European Union, Europe’s second-highest court, ruled on Wednesday that the EU has the right to label some natural gas and nuclear projects as “sustainable investments,” dismissing a challenge brought by Austria.
In 2022, the European Commission updated in 2022 its Taxonomy Complementary Climate Delegated Act on climate change mitigation and adaptation covering certain gas and nuclear activities. Under the new taxonomy, some gas projects, including several pipelines, were given a “sustainable investment” status. Gas projects are “transitional” if they contribute to the transition from coal to renewables, the EU says.
Faced with uncertainty in energy supply after the Russian invasion of Ukraine and the energy crisis that followed, the EU allowed certain nuclear and gas projects to be classed as “sustainable investments”.
In its ruling today, the General Court said that “The Commission was entitled to take the view that certain economic activities in the nuclear energy and fossil gas sectors can, under certain conditions, contribute substantially to climate change mitigation and climate change adaptation.”
With this ruling, the court dismissed Austria’s action against the inclusion of nuclear energy and fossil gas in the sustainable investment framework.
Austria had sought an annulment of the regulation.
But the court sided with the Commission and noted that the EC “was entitled to take the view that nuclear energy generation has near to zero greenhouse gas emissions and that there are currently no technologically and economically feasible low-carbon alternatives at a sufficient scale, such as renewable energy sources, to cover the energy demand in a continuous and reliable manner.”
“The approach taken by the 2022 delegated regulation is a gradual approach based on a reduction of greenhouse gas emissions in stages, while allowing for security of supply,” the General Court said.
The court’s decision is “very regrettable,” Austrian Climate Minister Norbert Totschnig said in a statement sent to AFP.
Environmentalists weren’t happy with the court’s ruling, either.
“A dark day for the climate. The ruling is a major setback for climate and consumer protection,” Martin Kaiser, executive director of Greenpeace Germany, said.
“With this ruling, the European Court of Justice legitimizes greenwashing in the financial sector and undermines Europe’s climate targets,” Kaiser added.
By Michael Kern for Oilprice.com
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