Gas Still No Sure Bet in EU's Transition

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On the face of it, the European Union’s proposed inclusion of some new natural gas-fired power plants in its “green taxonomy” appears to guarantee a role for gas in the energy transition. But a closer look reveals the criteria for such projects to qualify as sustainable could be so strict that it could be difficult and cost-prohibitive to build new gas plants and infrastructure. Beyond 2030, the outlook for gas on the continent is much clearer, with no leniency for projects that are not focused on renewable or low-carbon gas from green hydrogen or biomass. The taxonomy is the EU’s labeling system to help investors decide where to put their money in the transition. It aims to stop “greenwashing,” where companies or investors overstate their ecofriendly credentials. Investment in gas would not be banned even if it was excluded from the sustainable technology list, but it would de-emphasize them and steer EU cash to other low-carbon projects. Taxonomy is more for private funds than EU funds. Some investment funds and sectors of the financial community might also not invest as much in EU energy technologies that aren't included in the taxonomy, making the inclusion of gas important.

Gas Demand, Gas-Fired Electricity, Low-Carbon Policy
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