EU: Austria files legal challenge in CJEU against the Commission for inclusion of nuclear and natural gas in the Taxonomy

The EU Taxonomy Complementary Climate Delegated Act covering certain nuclear and natural gas activities came into force on 4 August 2022 and shall apply from 1 January 2023. However, a number of NGOs have recently asked the European Commission to review the inclusion of natural gas and nuclear in the Delegated Act. For more information on the NGOs’ challenge, see our previous blog post: Legal challenges to the inclusion of nuclear and natural gas in the EU green taxonomy.

Austria has consistently warned that it planned to challenge the inclusion of nuclear and natural gas in the Taxonomy Regulation since the end of 2021 when this proposal was debated. According to the Financial Times (see here), Austria formally submitted its claim to the Court of the European Union (CJEU) on 7 October 2022. 

The text of the claim is not publicly available yet. However, based on a publication by Austria’s Ministry for Climate Action (see here), a press release from the law firm representing Austria (see here) and other press reports (for example, see here), Austria has laid out a variety of arguments, including the following:

1. nuclear energy does not meet the requirements of the Taxonomy Regulation, including the "do no significant harm" principle; the claim refers to Chernobyl, Fukushima and the current disputes surrounding the Zaporizhia nuclear power plant in Ukraine as well as the question of the final disposal of radioactive material;
2. nuclear power is also "too expensive and too slow to help us in the fight against the climate crisis”; there is also a suspicion "that this is not intended as a transitional technology, but as a permanent solution”;
3. natural gas is a climate-damaging energy source;
4. certifying natural gas as green could delay the EU’s transition to clean energy by encouraging further investment in the fossil fuel;
5. nuclear power and natural gas were not mentioned in the Taxonomy Regulation nor could they be regarded as a "transition technology" as this is expressly limited to activities for which there are still no sustainable alternatives; it is not within the Commission's competence to independently make such far-reaching and politically sensitive decisions;
6. procedural requirements, such as the necessary impact assessment, public consultation and timely consultation of Member States, were insufficiently met.

The CJEU will now translate the claim and send it to Member States, who will then decide if they want to support Austria’s case. Luxembourg has already announced that it would support Austria by filing an application to intervene (see here).

On 10 October 2022, Mr René Repasi, a member of the European Parliament, also launched an action in the CJEU for annulment of the Delegated Act (see his publication here and additional Q&As here). He argues that the qualification of nuclear and natural gas activities as sustainable could only be done by the European Parliament and the Council under the ordinary legislative procedure and not by means of a delegated act.

If the legal challenges are successful and depending on the court's ruling, it may be possible that the Commission decides to commission additional scientific studies and subsequently reworks the technical screening criteria, but upholds the inclusion of gas and/or nuclear in the Taxonomy with stricter criteria. Unlike solid fossil fuels such as coal, natural gas and nuclear activities are not explicitly excluded from the Taxonomy Regulation. If the court declares the inclusion of nuclear and natural gas activities in the Taxonomy Regulation as completely null and void (which seems less likely than the first option), nuclear and natural gas activities could no longer contribute to a sustainable portfolio. However, the legal challenges could take longer than two years, especially since in the present case an appeal is also conceivable.

In the meantime, the Complementary Delegated Act remains legally valid and is still due to come into force on 1 January 2023, unless and until such time as either the Commission or the CJEU decide to revoke it.