The EU’s General Court has ruled that nuclear energy and fossil gas activities may be included in the EU Taxonomy, rejecting Austria’s challenge to exclude them from the classification system for sustainable economic activities. 

According to the ruling, the European Commission was within its authority to determine that certain nuclear and gas activities can, under specific conditions, make a substantial contribution to climate change mitigation and adaptation. The EU Taxonomy, a key element of the EU Action Plan on Sustainable Finance, serves as a framework to guide capital flows towards activities that support the EU’s sustainability objectives. To qualify, activities must significantly contribute to at least one of the six environmental goals while ensuring no significant harm to the others. These goals include climate change mitigation, climate change adaptation, sustainable water and marine use, circular economy transition, pollution prevention and control, and biodiversity protection. 

While the taxonomy regulation took effect in early 2022, the status of nuclear and gas was undecided until the Commission issued a Delegated Act setting criteria and disclosure rules for their inclusion. Despite opposition from some member states and lawmakers, the proposal was upheld by a majority of MEPs. Austria subsequently filed a case with the General Court in October 2022, contesting the Commission’s decision. 

In its recent judgment, however, the Court dismissed Austria’s claims, stating that the Commission did not overstep its legislative powers. It affirmed that nuclear generation produces near-zero greenhouse gas emissions, with no currently viable large-scale low-carbon alternatives, and that associated risks had been adequately considered. Similarly, the Court agreed that nuclear and gas activities can, under defined conditions, play a transitional role in reducing emissions and ensuring energy security, consistent with the EU’s gradual decarbonisation pathway. 

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