Nuclear energy faces hurdles to be included in clean energy investments

WNN 02 July 2021

Nuclear energy has been excluded from the UK government's Green Financing Framework, while several EU Member States have written to the European Commission to oppose nuclear's inclusion in the bloc's green taxonomy.

The UK's Green Financing Framework describes how the government plans to finance expenditures through the issuance of green gilts and the retail Green Savings Bonds that it says will be critical in tackling climate change and other environmental challenges. The framework, which was produced and published yesterday by the Treasury, sets out the basis for identification, selection, verification and reporting of the green projects that are eligible for such financing.

Under 'exclusions', the document says: "Recognising that many sustainable investors have exclusionary criteria in place around nuclear energy, the UK government will not finance any nuclear energy-related expenditures under the Framework."

It adds: "The UK government, however, recognises that reaching net zero emissions will require all energy to be delivered to consumers in zero-carbon forms and be derived from low-carbon sources. Nuclear power is, and will continue to be, a key part of the UK’s low-carbon energy mix alongside solar and wind generation and carbon capture and storage. All these technologies are important in tackling climate change and diversifying the UK’s supply, contributing to the UK’s energy security and sustainable growth."

The Framework aligns with the 2021 International Capital Market Association Green Bond Principles.

"To enable investors to follow the progress and positive impact delivered," the Treasury said it intends to publish an allocation report on its Eligible Green Expenditures on an annual basis and an impact report setting out the environmental impacts and social benefits at least biennially.

The UK is also in the process of developing its own 'green taxonomy'.

Germany-led opposition

Meanwhile, a group of five EU Member States, led by Germany, have written to the European Commission asking for nuclear energy to remain excluded from the EU Taxonomy on Sustainable Finance.

Their letter follows the assessment of the Joint Research Centre (JRC), whose mission is to support EU policies with independent evidence throughout the whole policy cycle, that nuclear energy does no more harm to human health or the environment than any other power-producing technology considered to be sustainable.

The letter - signed by the environment or energy ministers of Austria, Denmark, Germany, Luxembourg and Spain - points to “shortcomings” in the JRC report, which was published in April.

The ministers said the JRC's conclusion was "a misconception" and based on "two grave methodological shortcomings".

The JRC "neglects to address the residual nuclear risk, assessing only the normal operation of nuclear power plants" and "disregards the life-cycle approach", according to the ministers.

"We recognise the sovereign right of Member States to decide for or against nuclear power as part of their national energy systems. However, we are concerned that including nuclear power in the Taxonomy would permanently damage its integrity, credibility and therefore its usefulness," they wrote.

The two expert groups tasked by the European Commission with the review of the JRC report on the sustainability of nuclear energy published their assessments today. They are here and here.

The Article 31 group largely agrees with the conclusions of the JRC report, while the Scientific Committee on Health, Environmental and Emerging Risks recognises its own lack of the requisite expertise to conduct this assessment but raises some concerns about the conclusions of the JRC report.

Researched and written by World Nuclear News