EU green finance deal blocked by the UK and France
A deal was made last week by EU lawmakers that would establish new standards on green bonds and other green financial products. However, this has now been blocked in a move led by the UK and France over fears that it would stop investments in gas and nuclear projects.
The UK and France led the campaign to block the deal, which is considered a huge setback for the EU, as the Commission has just revealed what it intends to include in its “Green Deal”. Although the details of the deal aren’t finalised, it aims to dramatically cut carbon emissions.
France, the UK, Hungary, Poland, the Czech Republic, Romania, Slovenia, Bulgaria, and Slovakia all voted against the deal, saying that pushing for investments in sustainable products would prevent any investments being made in projects that didn’t have the green label.
It was argued that, although nuclear investments were not excluded from the regulations – known as taxonomy – it would be extremely hard to give them a green label, and this could end up reducing future funding in those industries, even though they can be low-carbon sources.
France is currently dependent on nuclear energy, and other European countries that are reliant on coal support moving to nuclear as an alternative. EU lawmakers wanted, instead, to exclude all fossil fuel and nuclear funding from the regulations, but say they are willing to compromise.
The taxonomy was seen as a key part of the Green Deal. The EU argues that it would help protect the environment by encouraging investment in green projects and help to deal with “greenwashing”, or companies using green labels misleadingly.
EU rules say the governments and lawmakers must reach a final compromise in cases that opinions differ and they must reach an agreement on how economic activities will be regulated to reach climate goals and protect the concerns of these countries.