What a hoo-ha! Under pressure from theFrench government and some Eastern European countries, the EU Commission wants to classify electricity generation from nuclear and gas-fired power plants as “sustainable”. This promptly sent Europe’s environmental movements and the Greens into an uproar. Greenpeace is outraged that this “taxonomy” announcement is a “licence to greenwash”. A ‘green’ label for yesterday’s technologies is a “provocation”, said Luxembourg’s Energy Minister Claude Turmes. Germany’s new coalition government is now in the throes of its first internal dispute, thanks to this announcement. Meanwhile, Austria wants to file a complaint with the European Court of Justice.

But the outrage is out of proportion to the actual significance of the process. Certainly, the only “sustainable” thing about nuclear power is the guarantee of radiation from the waste, which is lethal, even in milligram doses. Electricity from natural gas is hardly less harmful than that from coal, because huge amounts of methane — a potent greenhouse gas— are released during extraction.

But the media’s view — that as a result of this planned taxonomy, Europe will be threatened by an abundance of new nuclear and gas-fired power plants — is misleading.

After all, all that matters is that the EU gets a state-sanctioned seal of approval for climate-friendly capital investments to use it to steer private investor money in the desired direction. If French President Emmanuel Macron has now adapted this seal to conform to the wishes of his nuclear community, and if the natural gas lobby has espoused its false propaganda of “transitional technology” into the draft law, then this damages the credibility of the project. But no pension fund, no insurance company and no investment fund will invest a single Euro in nuclear power plants merely because they are labelled ‘green’ by the Commission.

The reason is that electricity that is produced with energy from split uranium atoms is simply uneconomical. The International Energy Agency of the OECD countries (IEA) calculates that with production costs of USD 65 per megawatt-hour, nuclear electricity is already one-third more expensive than wind power and photovoltaic electricity. By 2030, IEA experts expect that this gap will grow to more than 50%.

That explains why no private companies in the world invest in new nuclear reactors at their own risk. It only happens if the taxpayer guarantees the profits and is liable for any possible damage. That’s the case at Hinkley Point in the UK, where the government guaranteed the operators a purchase at twice the market price for 30 years.

This dubious EU label is also largely irrelevant for the construction of gas-fired power plants. Yes, they will still be needed for a while to compensate for the fluctuating supply from wind and solar power, but their usefulness is limited, thanks to the advancing use of battery storage and electricity supply via a better grid across all borders. This way, a lack of wind or battery capacity in one part of Europe can be compensated by supply from another. The EU seal will not change this.

No wonder, then, that the world’s leading capital managers with a combined total of €40 trillion under management have declared that the sustainability tag for natural gas and nuclear power would only “frustrate the efforts of investors seeking to drive the decarbonisation”. In plain language, the finance industry will not use the EU label but will recommend other investments to their climate-conscious clients. No wonder then, that German Chancellor Olaf Scholz suggested that the Commission’s proposal “not be overestimated”. The issue is simply not worth arguing about with his colleague Macron.