EU countries are split over sustainable energy funding

Significance

Particular areas of controversy include whether nuclear power will be deemed sustainable, and whether natural gas technologies which reduce emissions by displacing higher-emission fuels should be included. The taxonomy will also affect the prospects for bioenergy.

Impacts

• Small hydroelectric projects are likely to miss out on funding on the basis that they disrupt water ecosystems.
• Lack of funding for natural gas projects will focus the sector's attention on repurposing existing assets for low carbon gas use.
• Coal-to-biomass conversions will find it increasingly hard to gain a social license.
• Periodic review of the sustainability taxonomy creates investment risk for project developers.