EU Financial Services Commissioner Mairead McGuinness has told The Financial Times that the bloc will take more time before coming to a decision on whether or not to include nuclear power and natural gas under its “taxonomy on sustainable financing”, originally due this autumn.

The delay comes amid the continuing energy crisis, which has led to the collapse of utility companies in the UK and has sparked calls for the EU to provide greater guidance and assistance to member states. With electricity prices surging, European leaders are now due to meet tomorrow to discuss solutions and the now-delayed taxonomy.

“As we come to the end of the year there will be more pressure to resolve this,” said McGuinness. “We don’t have a ready-made solution because this is, both technically but politically . . . one of those issues where you have very divided views.”

Nuclear power has long been a source of contention within green financing, and recent weeks have seen the debate only intensify between nations that believe the inherent dangers outweigh the benefits and those that insist nuclear power is vital to the energy transition and their own energy security. This week alone, 10 countries, including France, Finland, Poland, and Hungary have said that it is “absolutely necessary that nuclear power was included in the taxonomy framework”.

McGuinness has said that the proposal may be pushed back into the next year, particularly in light of various elections in several key member states. Given the intensity of debate, both from member states and interested parties such as environmental groups, it will likely take significant political will to come to any sort of unified decision.

As McGuinness told The Financial Times: “We’re hearing from citizens and businesses about higher energy costs and keeping the lights on. We must make sure we don’t create fears that this transition is a problem because the transition is the solution.”

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By GlobalData

While there are reportedly various options on the table for how the taxonomy may ultimately shake out, it will doubtless prove a benchmark for future green financing. Within the EU, it will form the foundation for a “green bond standard” that will be used to issue €250bn as part of the bloc’s recovery fund.