By classifying gas and nuclear as “green” investments the EU has indirectly handed Putin a pay check. More must be done, including sanctions on uranium, to end his grip on Europe’s power supply.
Despite Europe’s efforts to end reliance on Russian energy, there is one fuel that has evaded all sanctions. Uranium from Russia accounts for a fifth of the imports used to produce energy from nuclear power plants within the EU, while another fifth comes from Russia’s nearby ally Kazakhstan.
Most EU countries that use nuclear power rely on Russia for some part of their fuel supply chain and Rosatom, the Russian state-run nuclear power giant, has been operating its expansive European business as usual; its fuel manufacturing facility has €14.6bn in outstanding orders. Why, when Russian gas and oil have become untouchable, does nuclear get a free pass?
- It’s “green”. Last week, the EU parliament voted to classify nuclear and gas as “green” investments, allowing new projects to access billions in loans and subsidies. Many investors and scientists were perplexed by the decision. Svitlana Krakovska, a climate scientist and head of the Ukrainian delegation to the IPCC, told Tortoise she was concerned it sent the wrong message to both Russia and the world: “It’s really a gift for Putin. It’s giving him a small victory which he needs right now. The European Parliament has betrayed not only Ukrainians but themselves.”
Under the taxonomy, new gas projects count as green so long as they limit emissions and transition into low-carbon fuels like hydrogen by 2035. Nuclear projects count if they are deemed safe and dispose of waste appropriately. While member states are unlikely to take Russian cash for projects, by doubling down on longer-term gas and nuclear investments, the EU is effectively locking in higher global demand – and Russia can continue selling its gas and uranium to other countries at high prices.
- Russia runs the industry. Since Putin came to power in 1999, Russia has sold more nuclear technology abroad than the United States, France, China, South Korea and Japan combined. It also owns around 40 per cent of all the uranium enrichment infrastructure in the world. EU member states, particularly in eastern Europe, are dependent on Russia’s uranium supply: in the Czech Republic, Hungary, Finland, Bulgaria and Slovakia, there is no authorised nuclear fuel alternative that can be used in Russian-made reactors.
France, where nuclear power produces 70 per cent of electricity, doesn’t rely on Russia for uranium. But its nuclear industry is nevertheless exposed to Russian interests, through a deal between Rosatom and the heavily-indebted state supplier, EDF. Rosatom has also signed long-term contracts to build and maintain reactors in Hungary, Bulgaria and Turkey.
- Politics. The agreed taxonomy is partly a back scratching exercise between German MEPs (many of whom fiercely oppose nuclear, but fear economic ruin from stopping gas) and French MEPs (who want to preserve France’s lead in nuclear energy). But there are also questions over Russia’s meddling in the process: for example, a report from Greenpeace highlights Rosatom’s influence as a board member of the World Nuclear Association – a key participant in the negotiations. It also questions what lobbying power Russian state energy giants Gazprom and Lukoil were able to wield through subsidiaries.
Putin has spent 20 years carefully entwining Europe’s energy systems with Russia’s – and nuclear power is a key part of that mission. Biden has acknowledged the security threat this poses and has pledged to help countries like the Czech Republic and Ukraine to diversify their uranium supplies. But a push by German diplomats to put Russian nuclear on the EU’s list of sanction targets has yet to materialise.
The taxonomy decision isn’t just a failure to show a united front against Russia. It’s about leadership on climate too. “The problem is the symbolism,” says Sean Kidney, CEO of the Climate Bonds Initiative, “One battle is to shift the European economy to become cleaner and greener. But the most important battle is to influence the direction of the rest of the planet. Europe has not been very good at thinking globally.”
Similar labelling schemes in South Africa and Bangladesh, and indeed in Russia itself, have excluded gas from the list of “green” investments. It’s fair to say Europe leads those countries in many aspects of the transition to net zero. This isn’t one of them.
Bolsonaro or the forest
Satellite data has shown that a record-breaking 3,890 square km of the Amazon were deforested in the first six months of this year – an area five times the size of New York City. Much of the felling took place on a new front in the Southern Amazon, in the states of Amazonas, Pará and Mato Grosso. The murders last month of Dom Phillips, a British journalist and Bruno Pereira, a Brazilian indigenous peoples expert, were a grim reminder of the region’s growing lawlessness. Voters in Brazil are preparing for national elections in October. With scientists now warning that these numbers push the Amazon into the “tipping point range” of permanently becoming open savannah, it really is a choice between “Bolsonaro or the forest”.
Not so rare
The world’s second-largest rare earth reserve has been discovered in Turkey, raising the possibility that China’s market dominance could become disrupted. The site in central Anatolia contains 694 million tons of elements needed in the construction of EVs and defence equipment – but turning those deposits into high-value concentrate is another matter. As they say in the mining industry, “grade is king”. To note: Chinese state media is already on the offensive, arguing that they have an “incomparable cost advantage” for rare earths. Let’s wait and see.
Nord stream blues
Citizens in Germany and France are bracing themselves for a total cut off in Russian gas supplies. The taps on Nord Stream 1, the pipeline that delivers gas to Germany via the Baltic, are due to close for 10 to 14 days for yearly maintenance. The big fear is that Russia will halt the flow permanently. Both countries are taking energy saving measures that include dimming street lights, rationing hot water and shutting down swimming pools. “The situation is very serious, Helmut Dedy, head of the German Association of Towns and Cities tells the FT, “it’s already clear we’re going to have to leave our comfort zone.” With energy prices already rising up to 200% for consumers in Germany and gas storage at 63% of capacity, one could argue that’s already the case.
Keep your fin up
Here’s what hope looks like: 150 southern fin whales having a feeding frenzy in Antarctica. According to scientists, numbers of the world’s second-biggest animal have been slowly recovering since a 1976 whaling ban reduced them to 2% of their original population size. This latest sighting by filmmakers from the BBC is thought to be the largest ever recorded, and provides hard evidence that, even for whales that live up to 80 years and only have one calf a year, a little break can make a lot of difference.
Thanks for reading.
Barney Macintyre
Edited by Jeevan Vasagar.
With thanks to our coalition members: a network of organisations similarly committed to achieving Net Zero