Austria loses dispute with Commission over classifying nuclear and gas as green investments

Austria has lost its court battle against EU rules that classify nuclear energy and natural gas as environmentally friendly investments. The Austrian government challenged the European Commission’s decision to include gas and nuclear energy among investments that can be labelled sustainable in the bloc. The General Court of the Court of Justice of the EU sided with the EU executive and ruled that the Commission had not exceeded its powers by including nuclear energy and gas in the sustainable investment framework. Austria’s Environment Ministry described the ruling as regrettable.

According to the court’s ruling, the EC was entitled to conclude that certain economic activities in the nuclear energy and gas sectors can, under certain conditions, make a substantial contribution to climate change mitigation.

“We have been and remain of the view that nuclear energy does not meet the criteria for environmental sustainability. Fossil gas will play only a temporary role in the energy transition,” Austria’s Environment Ministry said, according to Reuters.

It added that it would now review the ruling before deciding on possible next steps, including whether to appeal. The lawsuit was brought before the EU court by the previous coalition government, in which the Greens headed the Environment Ministry.

Adding gas and nuclear energy to the EU taxonomy—the framework that determines which economic activities are considered environmentally sustainable—exposed deep divisions among member states in 2022 over which energy sources to use to meet climate targets. Countries such as Spain and Denmark argued that it was not credible to label gas, a fossil fuel that emits carbon dioxide, as climate-friendly. Poland and Bulgaria, by contrast, were among the countries seeking support for gas investments, as these could help them move away from more polluting coal, Reuters noted.

In its lawsuit, Austria argued that Brussels should remove gas and nuclear energy from the taxonomy, among other reasons because nuclear energy cannot meet the requirement to “do no significant harm” to the environment, given concerns about radioactive waste. Austria is generally opposed to nuclear energy, and no nuclear power plant has ever been built in the country.