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The
European Commission drafted a plan late last year to label some
gas and nuclear investments as green in the EU's "taxonomy," a
long-awaited rule book to define which investments can be
labelled as climate-friendly in Europe.
The Institutional Investors Group on Climate Change (IIGCC),
whose 370 members include most of the world's biggest asset
managers such as BlackRock and Vanguard, on Wednesday said doing
so would undermine the EU's attempts to lead international
efforts to set credible, science-based standards for green
investments.
"We remain strongly opposed to any inclusion of gas within the
scope of the Taxonomy," IIGCC Chief Executive Stephanie Pfeifer
said in an open letter to European Union member states and the
bloc's policymakers.
"It is our view that the proposals... would seriously compromise
Europe’s status as a global leader in sustainable finance,
potentially triggering a 'race to the bottom' which could dilute
the level of climate ambition within emerging jurisdictional
taxonomies."
Natural gas emits roughly half the CO2 emissions of coal when
burned in power plants, and some EU states see it as key to
curbing their reliance on coal. But gas infrastructure is also
associated with leaks of methane, a potent planet-warming gas.
EU countries' debate over gas has intensified in recent months,
as gas prices soared to record highs and amid tensions with
Russia, the EU's biggest gas supplier.
Experts had advised the Commission not to label gas plants as
green investments unless they met a 100g CO2e/kWh emissions
limit. The Commission's initial proposal for the rules had
included that limit, but it faced opposition from countries
including Poland and Hungary.
The latest draft proposal, seen by Reuters, would set conditions
including a 270g CO2e/kwh limit for gas plants until 2030.
IIGCC said that would allow energy companies to use the
taxonomy's green label despite not being on track to reach net
zero emissions by 2050 - the target scientists say the world
must reach to avoid disastrous climate change.
"This in turn hinders the capacity of our members to align their
portfolios with net zero, undermining the whole purpose of the
Taxonomy," it said.
The letter cited the International Energy Agency's calculation
that to reach net zero emissions by 2050 globally, natural gas
demand must drop 8% below 2019 levels by 2030.
($1 = 0.8802 euros)
(Editing by Bernadette Baum)
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