EU Court confirms: Nuclear power and gas classified as climate-friendly

The EU Commission was allowed to classify nuclear power plants and natural gas-fired power plants as "ecologically sustainable." The General Court of the European Union (CJEU) ruled this Wednesday, rejecting an appeal by Austria.

The EU aims to become climate-neutral by 2050. To ensure that the necessary private capital flows into the right, i.e., ecologically sustainable, channels, the EU specifies which investments may be advertised as "sustainable."

The underlying EU taxonomy regulation dates back to 2020 and contained primarily abstract requirements. Only investments in energy generation from solid fossil fuels such as coal were explicitly excluded. A "delegated regulation" of the EU Commission from March 2022 set out more specific requirements. According to this regulation, investments in nuclear and gas-fired power plants are also considered sustainable. These are important transition technologies to an energy supply based primarily on renewable energies.

Austria filed a lawsuit with the General Court against the classification of nuclear and gas-fired power plants as sustainable. This was the responsibility of the then Climate Protection Minister, Leonore Gewessler (Greens). Austria was supported only by Luxembourg. The EU Commission, however, was explicitly supported by nine states, including France, Finland, and Poland.

A Grand Chamber composed of 15 judges rejected the Austrian action in a 111-page ruling. The Commission's delegated regulation did not violate the underlying Taxonomy Regulation or other EU law. The Taxonomy Regulation did not explicitly exclude nuclear and gas-fired power plants.

The court repeatedly emphasized the "wide scope" of the European Commission in implementing the Taxonomy Regulation. For example, Austria argued that the financing of nuclear power plants hinders the expansion of renewable energies because of a lack of financial resources. In contrast, the European Commission assumed that nuclear power plants, which ensure baseload supply, actually facilitate the expansion of renewable energies. According to the General Court, this is in any case "not a manifest error of assessment."

The General Court also ruled that the EU Commission was right not to take into account nuclear power risks from uranium mining or fuel transport. The final disposal of high-level radioactive waste could be considered manageable.

According to the General Court, gas-fired power plants could be classified as a sustainable transitional technology because they also serve to ensure security of supply and enable a gradual approach towards climate neutrality.

Austria could still appeal the General Court's ruling to the higher-ranking European Court of Justice (ECJ). However, the Greens have not been part of the Vienna federal government, which currently consists of the ÖVP, SPÖ, and Neos, since November 2024. Current Climate Protection Minister Norbert Totschnig (ÖVP) intends to review the ruling first.

Two similar lawsuits filed by Greenpeace and Client Earth are still pending before the General Court. However, after the clear rejection of the Austrian lawsuit, the environmental organizations are unlikely to win. "With this decision, the European Court is legitimizing greenwashing in the financial sector and undermining European climate goals," Greenpeace board member Martin Kaiser criticized the current ruling.