EU drafts plan to label gas, nuclear investments as green

The European Union has drawn up plans to label some natural gas and nuclear energy projects as "green" investments after a year-long battle between governments over which investments are truly climate friendly.

The European Commission is expected to propose rules in January deciding whether gas and nuclear projects will be included in the EU "sustainable finance taxonomy".

This is a list of economic activies and the environmental criteria they must meet to be labelled as green investments. By restricting the "green" label to truly climate friendly projects, the system aims to make those investments more attractive to private capital, and stop "greenwashing", where companies or investors overstate their eco-friendly credentials.

Brussels has also made moves to apply the taxonomy to some EU funding, meaning the rules could decide which projects are eligible for certain public finance.

A draft of the Commission's proposal, seen by Reuters, would label nuclear power plant investments as green if the project has a plan, funds and a site to safely dispose of radioactive waste. To be deemed green, new nuclear plants must receive construction permits before 2045.

Investments in natural gas power plants would also be deemed green if they produce emissions below 270g of CO2 equivalent per kilowatt hour, replace a more polluting fossil fuel plant, and receive a construction permit by December 31 2030.