Gas and nu­clear in­dus­tries fight to the end for 'green' EU in­vest­ment la­bel

The Pak Banker - - COMPANIES / BOSS - BRUS­SELS -REUTERS

The gas and nu­clear in­dus­tries have ramped up lob­by­ing to se­cure last-ditch changes to Euro­pean rules defin­ing which in­vest­ments are sus­tain­able, fear­ing that ex­clu­sion from a new "green" list could de­prive them of bil­lions of dol­lars of fund­ing. The cli­mate sec­tion of the EU's Sus­tain­able Fi­nance Tax­on­omy is due to be fi­nalised this year and it could prove cru­cial as nu­clear power and most nat­u­ral gas plants and pipe­lines were ex­cluded from a pro­vi­sional list pub­lished in March.

By forc­ing providers of fi­nan­cial prod­ucts to dis­close which in­vest­ments meet cli­mate cri­te­ria from the end of 2021, the new EU green fi­nance rules are de­signed to chan­nel cash to­wards projects that sup­port the bloc's cli­mate goals.

In the four months since the rules were pub­lished, gas and nu­clear in­dus­try rep­re­sen­ta­tives held 52 meet­ings - in per­son or vir­tu­ally - with EU of­fi­cials, ac­cord­ing to EU logs an­a­lysed by non-profit Re­claim Fi­nance and shared ex­clu­sively with Reuters. Over­all, in­dus­try rep­re­sen­ta­tives have held a to­tal of 310 meet­ings with EU pol­i­cy­mak­ers since the start of 2018, ac­cord­ing to the data based on trans­parency fil­ings pub­lished by July 8.

Nu­clear groups in par­tic­u­lar have stepped up their lob­by­ing, Of the 36 meet­ings they've held over the past two-and-a-half years, 10 have taken place since March.

Brus­sels is fac­ing calls to use the rules to guar­an­tee spend­ing from its 750 bil­lion euro ($888 bil­lion) COVID-19 re­cov­ery fund goes to green projects. The money starts flow­ing in 2021, mean­ing any de­lay to the rules could thwart this plan. Cli­mate cam­paign­ers urged the EU not to bow to pres­sure from the oil and gas in­dus­try as the stakes were too high.

"If EU in­sti­tu­tions and mem­ber states are se­ri­ous about build­ing a sus­tain­able Europe that con­fronts the cli­mate emer­gency, they need to break free from fos­sil-fuel lob­by­ists," said Paul Schreiber, a cam­paigner at Re­claim Fi­nance.

One of the main gripes of both en­ergy in­dus­tries is that they were locked out of the group of fi­nance ex­perts that came up with the pro­pos­als re­leased in March. A new EU sus­tain­able fi­nance plat­form will take over as the Euro­pean Com­mis­sion's ad­vi­sor on tax­on­omy next month - and both in­dus­tries are jostling to be included on the panel.

Re­becca Vaughan, an an­a­lyst at In­flu­enceMap, a non- profit whose lob­by­ing data is used by in­vestors, said the plat­form was prob­a­bly the gas in­dus­try's "last shot" at chang­ing the rules.

All four gas and nu­clear lobby groups in­ter­viewed by Reuters have ap­plied to be part of the sus­tain­able fi­nance plat­form, along with more than 500 other ap­pli­cants. The cur­rent ex­pert group - whose 35 mem­bers in­clude as­set man­agers, non-gov­ern­men­tal or­gan­i­sa­tions, banks and two en­ergy in­dus­try rep­re­sen­ta­tives - has said gas power plants should only be la­beled "sus­tain­able" if they meet strict emis­sions lim­its.

Ex­perts say those lim­its would cer­tainly be breached un­less the in­dus­try cap­tures the green­house gases it pro­duces while "green" hy­dro­gen could play a sig­nif­i­cant role.

In­vest­ments to ex­pand gas pipe­lines would also not be la­beled sus­tain­able, though in­fra­struc­ture ear­marked for the use of hy­dro­gen gen­er­ated with re­new­able en­ergy could be. The In­ter­na­tional As­so­ci­a­tion of Oil & Gas Pro­duc­ers (IOGP), Euro­gas and Fuel­sEurope lobby groups all told Reuters the sus­tain­able fi­nance rules should ac­knowl­edge more in­cre­men­tal cuts in emis­sions.

"The re­port was drafted, in a way, like we need to tran­si­tion to­mor­row," said Kamila Piotrowska, IOGP se­nior man­ager for pol­icy strat­egy. "This is a jour­ney and we need these tran­si­tional ac­tiv­i­ties."

They want the tax­on­omy to in­clude a list of so-called tran­si­tional ac­tiv­i­ties, in­clud­ing gas power plants, which some EU mem­ber states are look­ing to use as they move away from a heavy de­pen­dence on more-pol­lut­ing coal-fired power sta­tions. Lobby groups, in­clud­ing Euro­gas, also want pipe­lines to be classed as sus­tain­able, if they can be con­verted to low-car­bon gas at some point in fu­ture. "There's a real dan­ger that that means the ex­ist­ing (gas) plants in Europe could be deemed not sus­tain­able and there­fore un­able to raise any fi­nance for any­thing," said John Cooper di­rec­tor gen­eral of re­fin­ing in­dus­try as­so­ci­a­tion Fuel­sEurope.

Fuel­sEurope and IOGP have also asked the Com­mis­sion to con­sider ex­tend­ing the dead­line for com­pa­nies to com­ply. Asked whether tran­si­tional ac­tiv­i­ties might be included, a Euro­pean Com­mis­sion spokes­woman said in an emailed state­ment to Reuters that it was ex­plor­ing all the ar­gu­ments on what should be included, based on the rec­om­men­da­tions of its ex­pert group and feed­back from the in­dus­try.

The EU's ex­pert group says its cri­te­ria are sci­ence-based and de­signed to give in­cen­tives to bring about the rapid emis­sions cuts needed to give the world a chance of avoid­ing cat­a­strophic cli­mate change.

"A lot of peo­ple still think the tran­si­tion is about in­cre­men­tal small steps, and it's too late for that, un­for­tu­nately," said He­lena Vines Fi­es­tas, global head of stew­ard­ship and pol­icy at BNP Paribas As­set Man­age­ment and a mem­ber of the ex­pert group.

Nu­clear in­dus­try groups say the en­ergy de­serves a sus­tain­able la­bel, based on its low car­bon emis­sions and ex­ist­ing se­cure waste dis­posal sites. They fear that if nu­clear isn't deemed sus­tain­able, the cost of cap­i­tal for power plants will rise - a con­cern for an in­dus­try where flag­ship projects, such as Bri­tain's Hink­ley Point C re­ac­tor, are strug­gling with spi­ralling costs.

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