The European Parliament voted on 6 July not to object to the European Commission’s Complimentary Delegated Act (DA) with the technical screening criteria for nuclear power and natural gas under the Taxonomy Regulation (see press release).
There had been a great deal of speculation in the press in the lead up to the vote as to whether the Parliament would be able to secure enough votes to block the DA. The inclusion of nuclear and natural gas has been one of the most controversial aspects of the EU Taxonomy so far.
In the end, the result of the vote in the European Parliament was much less dramatic than expected, with only 278 MEPs voting against the DA, 328 voting in favour and 33 abstentions. The Parliament would have needed 353 votes to veto the DA.
Following this, if the Council does not object to the DA by 11 July 2022, the DA will then be published in the Official Journal of the EU and apply from 1 January 2023. Although the Council is not expected to object to the DA, two member states, Austria and Luxembourg, have confirmed that they plan to take legal action against the Commission: "We have already prepared ourselves intensively for this case in recent weeks and months and will file our lawsuit within the deadline set for this...It is neither credible, ambitious, nor knowledge-based, endangers our future and is more than irresponsible” (see here). Greenpeace have also said they intend to bring a legal challenge against the Commission (see here).
If the DA survives all this, it means that certain nuclear and natural gas activities could, from 1 January 2023, be classified as “environmentally sustainable” (i.e. green) transitional activities under the Taxonomy Regulation, provided they satisfy the technical screening criteria set out in the DA (as well as comply with the minimum social safeguards in the Taxonomy Regulation).
However, it is worth bearing in mind that just because the EU Taxonomy has labelled nuclear and natural gas as "environmentally sustainable" (under certain conditions) that does not mean that investors are under an obligation to finance those activities. Although any such investments may have to be disclosed separately under Article 8 of the Taxonomy Regulation.
For more information on the DA, including which nuclear and natural gas activities it applies to, see our previous blog post: EU Taxonomy: Commission publishes final Delegated Act with technical screening criteria for nuclear power and natural gas.