Power plants fuelled by natural gas will not be classed as “sustainable” or “transition” investments in Europe unless they meet emission limits which are so low that none are currently able to comply, according to draft EU rules seen by EURACTIV.
The new standards will be tabled in the coming weeks under the EU’s sustainable finance taxonomy, which determines what type of investments make a substantial contribution to the EU’s fight against climate change.
Failing to obtain the EU’s green label could deprive those power plants of billions of euros in funding as private investors seek shelter in investments seen as climate-friendly.
To qualify as a “sustainable” investment, gas power plants must not emit more than 100 grams of CO2 equivalent per kilowatt hour, according to the draft rules, seen by EURACTIV.
But the 100g CO2 limit would also prevent gas plants from being labelled as a “transition” technology on the way to reaching net-zero emissions by 2050.
According to the industry, this would hamper Poland’s efforts to replace its ageing fleet of polluting coal power stations with cleaner gas plants, which emit on average half the amount of CO2.
Combined cycles gas plants “are currently at 350-300g today which means investors in countries like Poland may not be able to consider CCGT investments as a transition activity,” said James Watson, secretary-general of trade association Eurogas.
“We fully expect natural gas to be classed as a ‘transition’ activity,” he said. “But the 100g threshold will unfortunately not allow this,” he told EURACTIV.