What is the Green Taxonomy?
The UK's Green Taxonomy is intended to provide a framework to classify environmentally sustainable economic activities for business and investors. It is the UK's version of the European Union Taxonomy model. The Government appointed an independent expert group, the Green Technical Advisory Group ("GTAG"), to provide advice on the design and implementation of the UK Green Taxonomy.
GTAG states the aims of the UK Green Taxonomy are:
- to provide a common framework or standard for investments that can be defined as environmentally sustainable;
- to tackle ‘greenwashing’ (this is the practice of using green marketing to suggest that an organisation's products, aims and policies are environmentally friendly);
- to improve understanding of environmental impacts to help companies and investors make informed green choices; and
- to support investment in sustainable projects and boost efforts to tackle climate change.
Why is nuclear being reclassified?
In short, to encourage greater investment in nuclear.
Jeremy Hunt states that the purpose of reclassifying nuclear energy as 'environmentally sustainable', and thereby fulfilling the criteria for inclusion on the Green Taxonomy list, will be positive for the UK. He suggests that reclassification will "encourage the private sector investment into our nuclear programme…giving [the nuclear programme] access to the same investment incentives as renewable energy". Mr Hunt also claimed that the reclassification will encourage more public investment.
The Government also tasked Great British Nuclear to address constraints in the nuclear market and support new nuclear builds, with the aim of nuclear power providing one quarter of UK electricity by 2050.
Reclassification will not be without its critics. A similar proposal at EU level, has seen several Member States publicly criticise the move, suggesting they will pursue legal action.
The Government's Energy Security Plan, published on 30 March 2023, included further detail on the Government's intention for nuclear generation (see our initial analysis)
A consultation on the UK's Green Taxonomy, which will include more detailed proposals on nuclear power, is expected to be published in the near future.