The Cattenom nuclear power plant across the border in France Library photo: Matic Zorman / Maison Moderne

The Cattenom nuclear power plant across the border in France Library photo: Matic Zorman / Maison Moderne

The grand duchy is considering filing a legal challenge against an EU proposal to include nuclear energy in its sustainable investment taxonomy, the government said in a statement on Friday.

The European Commission on 31 December had published proposals for its taxonomy that would label gas and nuclear power as sustainable energy sources, paying the way for investments, for example in nuclear power plants.

Luxembourg “from the start of the negotiations opposed the possible inclusion of nuclear energy and natural gas in the taxonomy,” the government said, adding that it “opposes this decision of the commission.”

Nuclear energy is “expensive and highly dangerous not only for citizens but also for the environment and natural resources,” the statement said.

Countries have until 12 January to deliver their feedback to the commission. It then goes to the European Parliament and European Council for scrutiny with up to six months to deliberate. “Luxembourg will continue to oppose this decision by the commission within the council,” the government said.

The European Council represents the governments of all 27 EU members.

The grand duchy has found an ally in Austria, with which it is considering a joint legal challenge in case the taxonomy is adopted including nuclear and gas. “We will closely examine the current draft and have already ordered a legal opinion over nuclear energy in the taxonomy,” Austria’s environment minister Leonore Gewessler said on Twitter on 1 January. “If these plans were to be implemented this way, we will sue.”

Both countries together with Denmark, Germany and Portugal during Cop26 had , saying the sustainable label must be nuclear-free.

But they are up against at least ten EU countries, led by France, that have asked the European Commission to recognise nuclear power as a low-carbon energy source that should be part of the transition to climate neutrality.

The EU has pledged to reduce emissions by 55% by 2030 and be carbon neutral by 2050. Nuclear power plants account for around a quarter of the electricity produced in the European Union.

Sustainable finance centre

“Including nuclear and natural gas in the taxonomy of sustainable finance would seriously undermine its credibility. This is why Luxembourg will do everything in its power to block this decision and avoid greenwashing,” environment minister Carole Dieschbourg (Déi Gréng) said.

Luxembourg has been trying to build its credentials as a centre for sustainable finance. A sustainable finance strategy last year, for example, aims to help financial sector players carry out climate scenario analyses and establish a monitoring framework to measure progress over time.

Environmentalists have that the strategy fails to provide a framework, binding targets and a timeline for the financial centre’s green transition.

“As one of the leaders in sustainable finance, Luxembourg remains firmly committed to contributing to the development of a credible taxonomy that can serve as an international standard, in the interest of the competitiveness of European financial services.” said finance minister Yuriko Backes (DP) in Friday’s statement.

Despite Luxembourg’s opposition to including nuclear power in the taxonomy, the country’s pension fund invests in energy providers operating nuclear power stations, such as Electricité de France (EDF), which runs Cattenom power plant near the Luxembourg border. The pension fund has pledged a .