Nuclear renaissance in Europe – could nuclear energy help Europe reach its Green Deal targets?
Amid fears of Russian escalation in Ukraine and the mounting energy and climate crisis, could nuclear energy be part of Europe’s solution to reach its Green Deal targets?
In a controversial vote, the European Commission green-labelled nuclear and gas energy projects, possibly to counter the prolonged effects of the Russia-Ukraine war.
Many of us may still remember where we were when the Fukushima nuclear disaster made news headlines around the world in March 2011. An unprecedented event that resulted from Japan’s most powerful earthquake ever recorded (9.0 on the Richter scale), and triggered one of the deadliest tsunamis to date. The 13 to 15 metre high waves swept across the nuclear plant, causing significant flooding and the failure of emergency generators, as well as a loss of power to the circulating pumps. The loss of reactor core cooling resulted in three nuclear core meltdowns, three hydrogen explosions, and the release of high-level radioactive contamination for the first time since the 1986 Chernobyl nuclear accident. Similarly to its predecessor, Fukushima received a level-7 rating — the highest — on the International Nuclear Event Classification. For past generations, Fukushima unburied unwanted memories of the worst Soviet-era nuclear accident, prompting the international community to re-evaluate the use of atomic energy. Fearing another potential radioactive catastrophe in Europe, some industrialised nations, namely Germany, Belgium and Switzerland, have committed to a nuclear power phase-out by 2034 while also developing ambitious green projects reliant on renewable energy sources in response to the climate crisis.
Reducing the dependence on fossil fuels to mitigate greenhouse gas emissions is imperative for successful climate change action. In recognition of the urgent and potentially irreversible threat climate change poses to humans and the planet, a menace that the UN has identified as the “defining issue of our time”, 194 state parties have adopted the “legally binding” 2015 Paris Climate Agreement, aiming to limit global temperature rise to 1.5 °C. However, since it came into force in 2016, energy-related carbon dioxide (CO2) emissions have risen, reaching a record-high 36.3 gigatonnes (Gt) in 2021, a 6% increase from 2020. Since the 2000s, concerted global efforts to produce electricity generated by wind, solar, hydropower, and other renewable sources have increased, yet have failed to fully replace fossil energy sources.
As the world gradually recovers from the effects of COVID-19 dependence on electricity is rising. Most nations continue to deepen their reliance on transport, domestic heating and industrial processes for economic functionality. While at its final point of use – that is, distribution of electricity to end use consumers – electricity is a clean and somewhat safe form of energy that does not directly lead to environmental impact. However, the production and transmission of electricity currently generate more than 40% of all energy-related carbon emissions. The Intergovernmental Panel on Climate Change (IPCC) estimates that the fossil fuels industry alone supplies around 80% of the world’s energy, contributing to nearly 89% of global CO2 emissions.
Long before climate change was on the agenda, nuclear energy had been championed as an alternative to fossil energy sources to deliver sustainable energy transitions. The electricity produced by a nuclear power plant is technically low-carbon and can be deployed on a large scale at the timeframe required, giving rise to the supply of clean, reliable and affordable electricity. During operation, nuclear power plants do not produce greenhouse gas emissions, and throughout its life cycle, nuclear emits the same amount of carbon dioxide equivalent emissions per unit of electricity as wind, and a third when compared to solar.
Nuclear power plants generate emissions from the processes of mining, refining, and transportation of uranium, as well as the manufacturing and construction of nuclear reactors and the production of reactor fuel. To succeed in the decarbonisation required to keep the average rise temperature below 1.5 °C, nuclear energy experts conclude that an increased role of nuclear energy is necessary.
In April 2020, the Joint Research Centre, The European Commission’s scientific body, released a report determining that nuclear power is a safe, low-carbon energy source in contrast to wind and hydro power’s climate change contribution. Today, nuclear energy accounts for 10% of the world’s electricity and one-third of low-carbon electricity, which is roughly equivalent to removing one-third of all cars from the world’s roads. In a paramount step to transitioning away from fossil fuels to renewable energy sources, Germany, under the Merkel administration, opted to become the world’s leading industrialised nation to abandon atomic energy following the Fukushima nuclear disaster. Germany committed to a total nuclear power plant phase-out by late 2022 – only to rely on cheap Russian natural gas, as did the majority of EU nations to keep their economies running.
In February 2022, everything changed. The invasion of Ukraine brought about an energy crisis across Europe, prompting the latter to consider sourcing natural gas from outside Russia or doubling down on renewable sources. In support of Ukraine, the EU began to impose sanctions on Russia's exports, reducing the bloc's dependency on Russian fossil fuels, which in 2021 accounted for 40% of its total gas consumption, more than 25% of its oil imports, and nearly 46% of its coal imports.
The European Green Deal in a nutshell
In compliance with the 2015 Paris Climate Agreement, the EU developed the world’s most ambitious green project to date, the EU Green Deal, coined “Europe’s man on the moon moment” by EU Commission Chief Ursula Von Der Leyen. Adopted in 2020, the deal is intended to be the EU’s new growth strategy to transition the 27-nation bloc’s economy to a sustainable economic model. This new model is committed to transforming the bloc from a high to a low-carbon prosperous economy while also enhancing people’s quality of life through cleaner air and water, better health and a thriving natural environment.
Ranging across 8 policy areas, the deal’s overarching goal is for the EU to become the world’s first “carbon-neutral continent” by 2050 through a profound overhaul of nearly every aspect of the European economy, from energy generation to consumption, transport, manufacturing and construction. The deal will also be subject to a framework of regulation and legislation, establishing additional targets, including a 50-55% reduction in greenhouse gas emissions by 2030, compared to 1990 levels. In addition, there will be a variety of incentives to strengthen private sector investments with key schemes for targeted sectors to halt species loss, cut waste and make better use of natural resources.
Nearly €1 trillion of sustainable investments is expected to fund the EU Green Deal over the next decade. Its financing is established in the EU Green Deal Investment Plan, also known as the Sustainable Europe Investment Plan, which encompasses two main financing streams. First, €528 billion will come from the 7-year long-term EU budget for 2021-2027 and the EU Emissions Trading System. Second, the InvestEU programme will provide €279 billion, encouraging private and public sector companies to make green investments through loan guarantees from the European Investment Bank (EIB). The EIB has also agreed to become the world’s first ‘climate bank’ by phasing out fossil fuel financing after 2021. Additionally, national governments will put aside a further €114 billion.
The deal recognises that a sustainable transition can only succeed if it is carried out fairly and inclusively, ensuring that no one’s left behind. As a result, The Just Transition Mechanism will mobilise at least €100 billion from the EU budget and InvestEU to focus on the regions most affected by the transition, financing various projects – from the creation of new workplaces to investments in renewable energy and sustainable transport. This mechanism is predominantly available to sectors highly dependent on fossil fuels and carbon-intensive processes across the EU.
To ensure high-quality projects are financed, The Structural Reform Support Programme will provide member states with technical assistance to facilitate the design and implementation of growth-enhancing reforms. Each year, within the EU budget framework (known as the Multiannual Financial Framework (MFF)), the Council and the European Parliament adopt an annual budget which is subject to yearly management and control of resources audits by the European Court of Auditors. In an annual report, each member is required to provide an account for the funds received from the EU under shared management. This includes that of the Green Deal, as well as the results of the audits and an assessment of how each beneficiary has utilised the funds legitimately.
To guarantee that green spending is benefiting the environment, the EU will employ an enhanced, robust reporting and monitoring system, developing specific procedures within the pertinent EU programmes. This includes the Common Agricultural Policy (farming subsidy program), which received backlash from green campaigners for promoting intensive farming. The reformed policy plans to help farmers produce food in more sustainable ways and direct subsidies to more green activities. Budgets allocated to research, science, and development will be directed towards lowering carbon emissions. For other sectors, a thorough roadmap of “50 actions for 2050” will be implemented. Moreover, high-tech industry jobs in electric vehicle manufacturing and sustainable building are to be created. Together with stakeholders, The European Commission will also hold a Sustainable Investment Summit every year to assess progress made on all fronts of the EU Investment Plan and identify new avenues for action.
Despite Europe cutting greenhouse gas emissions by 31% from 1990 to 2020, critics of the Green Deal estimate that current measures are nowhere near reaching the 2050 carbon neutral goal. Poland and Hungary, whose economies heavily rely on fossil fuels, have openly opposed the green agenda, with the former stating that they will reach carbon neutrality “at their own pace”. On the contrary, at least 8 countries, including Spain, Sweden and Latvia, have expressed the initiative to increase their 2030 emissions reduction targets. This has prompted a debate of possible divisions for when hard choices must be made - from stricter emission limits for the car industry, tougher agricultural policies, to the cessation of coal mines.
Nuclear and gas energy projects declared green by the European Commission
To meet the EU’s climate and energy targets for 2030 and achieve the Green Deal's comprehensive objectives, the need to introduce a common action plan for sustainable growth led to the creation of the EU taxonomy (EU’s investment rule book). As a classification system, the taxonomy aims to address greenwashing by allowing and guiding participants to pinpoint and invest in a list of environmentally sustainable economic activities designed to create security for investors, protect private investors from greenwashing and assist companies to become more climate-friendly. As per the taxonomy regulation, economic activities are considered sustainable if they 1) contribute to at least one of the six taxonomy’s environmental objectives and 2) do not do considerable harm to any of the other objectives while complying with fundamental human rights and labour standards.
Recently, the European Parliament voted to endorse labelling some gas and nuclear energy projects as green, potentially hindering Europe’s race to a long-term switch to more renewable sources and undermining emissions-cutting goals.
Gas energy projects could be green if the facility transitions to low carbon or renewable gasses such as biomass, bio-methane or green hydrogen by 2035. Nuclear energy would receive this label if the sites safely dispose of radioactive waste. At present, atomic energy is not considered sustainable as no permanent disposal site exists or has become available anywhere in the world. However, Finland is on track to open the world’s first permanent disposal site in 2024-2025, aiming to store high-level nuclear waste for around 100,000 years, 430 metres belowground. Once operating, Finland’s initiative will provide insight into a possible solution to the nuclear waste problem. If successful, other nations may follow suit.
To critics, this decision seems hypocritical and rather shows Europe’s prolonged commitment to fossil fuel dependence, including Russia’s gas. Thus contending that classifying gas and nuclear energy projects as sustainable is in itself greenwashing. However, the EU suggests that this measure is part of a pragmatic approach to the transition to renewable energy. Mairead McGuiness, the EU Commissioner for financial services, expressed that this new labelling is not greenwashing, as nuclear and gas are classified as transitional energy sources under the new taxonomy.
Nonetheless, environmentalists argue that the impacts of nuclear energy outweigh its benefits. Given the risks natural catastrophes and geopolitical conflicts pose, evidenced by Fukushima and the embattled Zaporizhzhia plant in Ukraine, the potential of a nuclear accident is unpredictable. Nuclear power plants usually take 10 to 15 years to build, requiring an extensive and robust regulatory framework. Nuclear reactors remain a capital-intensive technology as their construction costs may run into the billions and may also take too long to contribute to the 2050 neutrality goals. The environmental organisation, the Climate Action Network, suggests that the EU Commission’s new vote fails to redirect financial flows towards authentic climate-positive investments, sacrificing the scientific integrity of the taxonomy at the feet of fossil fuel, gas and nuclear lobbies. Further, investments in non-green-labelled activities are not prohibited under the EU taxonomy. How the law will affect investing trends is yet to be clear.