Utilities welcome Germany's pro-gas taxonomy feedback, but environmentalists cry foul

Utilities have welcomed the German government's pro-natural gas stance in its feedback to the European Commission’s sustainable finance taxonomy plans, but environmentalists say a green label for the fossil fuel will damage the credibility of the classification system. "With this statement the new federal government is demonstrating its willingness to shape the future," said Ingbert Liebing, managing director of the association of municipal utilities (VKU). He added the government feedback is "a consistent continuation of the coalition agreement" which clearly acknowledges the need for new gas-fired power plants. In contrast, NGO Environmental Action Germany (DUH) said the need for new gas power plants as part of the country's coal exit won’t turn the fuel into a green technology. "This will weigh heavily on the credibility of the government and the taxonomy," said DUH's Sascha Müller-Kraenner.  

In its opinion on the Commission's draft act for the taxonomy, the government reiterated its opposition to awarding a "green" label to nuclear power, but also called for easing restrictions on the use of fossil gas. It argued that, when used in “ultra-modern and efficient gas-fired power plants”, the fuel “forms a bridge for a limited transition period” to enable Germany’s rapid coal phase-out. Therefore, it can “achieve CO2 savings in the short term,” the feedback reads. It also called on the Commission to delete intermediate targets for the fuel switch to low-carbon gases such as hydrogen, as these are "not realistically achievable." In a joint statement, economy and climate minister Robert Habeck and environment minister Steffi Lemke said green hydrogen will be needed more urgently for decarbonising industrial processes. DUH welcomed this position and said green hydrogen "will be a valuable resource that should not be wasted by mixing it." 

The European Commission proposed including investments in nuclear power and certain natural gas projects in the taxonomy. The inclusion of nuclear has been advocated by France, whereas German politicians insisted that gas should be labelled sustainable as long as plants can later be converted to green hydrogen use. The European Commission is now set to introduce its final proposal and pass it on to the member states and the European Parliament for approval.