Prospective German government split over role of natural gas in EU taxonomy

The parties likely to form Germany’s next coalition government -  the Social Democrats (SPD), the Greens and the pro-business Free Democrats (FDP) – disagree over whether natural gas should be considered part of a sustainable energy supply, business daily Handelsblatt reports. A draft of the coalition treaty, which is expected to be made public next week, says in a section on the EU's forthcoming finance taxonomy that "the government will oppose the inclusion of nuclear power and gas as sustainable technologies," according to the article. The Greens have insisted on this phrasing and want to prevent the EU from classifying gas as sustainable even for a transitory period, but intense negotiations are still ongoing, sources told the paper. The association of municipal utilities (VKU) said that denying natural gas a sustainability label could endanger investments in natural gas plants, which most experts consider necessary on the way to climate neutrality, the article says.   

Earlier this week, more than 100 NGOs from across Europe called on Germany's chancellor-in-waiting Olaf Scholz to do everything in his power as current finance minister and prospective head of Germany's next government to keep nuclear and natural gas out of the EU taxonomy for sustainable investments. They argue that fossil natural gas causes large quantities of climate-damaging greenhouse gas emissions, even if those are lower than the emissions from coal-fired plants.
The EU taxonomy is a classification system that defines and ranks environmentally sustainable economic activities as a framework to allow investors to shift investments to climate-friendly alternatives. The question whether to include gas and nuclear in the taxonomy has divided the EU for some time, with France and other nations pushing for the inclusion of nuclear, while others insisting that gas should receive a sustainability label, arguing that it is a less carbon-intensive alternative to coal in the medium run.