Tilting at windmills

Actually, the EU's taxonomy regulation is intended as an instrument to give investors orientation and to direct capital into the restructuring of energy production and the economy. Thus private investments in green and sustainable projects should be able to contribute to the European Green Deal.

Now, the expected dispute has erupted over the as-yet-unadopted order. On New Year's Eve, of all nights, the EU Commission published the long-awaited recommendations - declaring nuclear power and natural gas as green energies for the transition. They are thus considered to have almost as much future potential as solar and wind power.

Especially from Germany there was fierce protest. The new Federal Minister of Economics and Climate Protection and also Chairman of the Green Party, Robert Habeck, criticized: "The EU Commission's proposals water down the good label for sustainability. In our view, there would have been no need for this addition to the taxonomy rules. We do not see an approval of the new proposals of the EU Commission." He speaks of "greenwashing" and hopes that the rules will not find acceptance on the financial market.

Yet the problem is homemade, as German media outlet Zeit points out: "The German government must now perform a difficult balancing act: Publicly, it opposes the categorization of nuclear power as green energy, but at last year's EU negotiations, Germany agreed to the deal - natural gas for nuclear power. For despite all protestations, the old German government was leading the negotiations thanks to its Commission President Ursula von der Leyen and thanks to its traditionally great influence in Brussels. Olaf Scholz, then finance minister and now chancellor, was also involved in the deal that his new Green coalition partner is revolting against."

The EU's plan was to be a green role model worldwide with the taxonomy regulation. That has now gone thoroughly wrong. (Image: Pixabay)

While France lobbied for the inclusion of nuclear power in the EU negotiations, Germany - still represented by the Grand Coalition back then - called for natural gas to be included in the regulation. This is now falling on the feet of the new government. Even in the coalition negotiations, the three governing parties of the 'traffic light' coalition were apparently unable to agree on a common line. Now a rotten compromise looms in the EU vote: as Reuters reports, they ultimately agreed behind closed doors to avoid a fight against the European Commission's compromise proposal and abstain from the vote when EU leaders will have the final say at a summit later this year, two people familiar with the decision said on condition of anonymity.

Europe's largest economy is thus leaving the open fight against the regulation to other, smaller countries. Austria, for example, has already threatened to sue: "Yesterday, the EU Commission took a step toward greenwashing nuclear power and fossil gas in a night-and-fog action," criticized Austrian Climate Protection Minister Leonore Gewessler, according to Tagesschau. "The timing of the publication alone shows that obviously even the EU Commission itself is not convinced of its decision. For Austria, however, it is quite clear that neither nuclear power nor the burning of fossil natural gas have to be included in the taxonomy." The Alpine republic already commissioned an expert opinion several months ago that concluded that nuclear power, at least, has no place on the list of sustainable technologies. The country is currently examining whether a lawsuit against the EU regulation could have a chance of success.

If that doesn't help, the only thing left to hope for is the self-regulation of the financial market to continue to invest primarily in renewable energies in the future. It will be tilting at windmills - one way or another.