The European Parliament voted today against a resolution aimed at excluding nuclear and gas energy from the EU Taxonomy, paving the way for their incorporation in the classification system for environmentally sustainable activities.

The initiative to keep nuclear and gas out of the Taxonomy was defeated by a vote of 328 against to 278 for, with 33 abstentions. In order to pass, a majority of 353 MEP votes would have been required.

The EU Taxonomy is part of the EU Action Plan on Sustainable Finance, established by the EU Technical Expert Group on Sustainable Finance (EU TEG). The taxonomy is a classification system enabling the categorization of economic activities that play key roles in contributing to the EU’s key environmental objectives, starting with climate change mitigation and climate change adaptation.

The regulation went into effect at the beginning of this year, with the status of nuclear and gas remaining initially undetermined, until the Commission published a Delegated Act, proposing criteria and disclosure rules for their inclusion in the Taxonomy. The publication of the Act moved the proposal on to the European Council Parliament and Council for formal adoption unless objected to by a qualified majority (72% of member states) in the Council or a majority (50%+) in Parliament.

While gas and nuclear energy are often viewed as transition energy sources that will be required to facilitate the shift from fossil-based power to a greener energy system, the European Commission’s own sustainable finance advisory group the EU Platform on Sustainable Finance recently opposed classifying them as green activities under the Taxonomy, warning that they don’t fit the strict criteria of the Taxonomy’s framework for transitional activities, which include making a substantial contribution to mitigation objectives and ensuring no significant harm.

The initiative in Parliament to exclude nuclear and gas was based on an objection to the Delegated Act passed last month by a majority of MEPs from the Economic and Monetary Affairs and the Environment, Public Health and Food Safety Committees. With today’s defeat of the objection, the act is likely to move forward, unless vetoed by the European Council, which would require a qualified majority of at least 72% of Member States representing at least 65% of the EU population.

Sustainability-focused and sustainable investment groups reacted to the vote with disappointment. Climate and environment-focused non-profit ClientEarth stated that it was considering legal action to challenge the inclusion of gas in the Taxonomy.

ClientEarth lawyer Marta Toporek said:

“Today’s vote is extremely disappointing and seriously risks putting the EU’s climate goals out of reach.

“Branding fossil gas as transitional and green in the Taxonomy is unlawful as it clashes with the EU’s key climate legislation, including the European Climate Law and the Taxonomy regulation itself.”