Simon Jessop, Kate Abnett

BRUSSELS, (Reuters) – ClientEarth, an environmental law firm has warned that the European Union would break its laws if it labels gas-fuelled energy investments as “green” under its upcoming financial regulations.

ClientEarth, in a Wednesday email to the EU executive, was seen by Reuters. ClientEarth stated that deeming gas environmentally friendly would offend other laws. ClientEarth also claimed that the EU has a legally binding goal to lower its net greenhouse gases emissions by at minimum 55% per year by 2030.

The EU is nearing completion of the climate section of its sustainable finance taxonomy. This regulation, which is the first of its kind, seeks to keep private capital away from polluting activities and instead into environmentally-friendly ones.

It is likely that the European Commission will make an announcement in the coming months about whether the climate taxonomy, which the majority of it had proposed earlier this year rules for, will declare nuclear energy green investments.

ClientEarth stated in the letter that “if it was adopted, it is likely to increase investment in activities using natural gas and would violate the commitments made by the European Commission at both international and EU levels.”

An official of the European Commission stated that it received the email and will respond “in good time”.

ClientEarth stated that legislation supporting funding for natural gas would cause money to be diverted from renewable energy. While the taxonomy will not prohibit investors from investing in gas projects, it will ban them from calling such investments sustainable.

Additionally, the lawyers who added gas did not meet the key requirement of the taxonomy regulations. These rules state that investments that are considered climate friendly must be “substantially to the stabilisation and reduction of greenhouse gas emissions at levels that do not threaten dangerous anthropogenic changes.”

Gas isn’t as polluting and as clean as coal but it does still produce carbon emissions from its combustion. It also produces methane which is linked to powerful greenhouse gasses. Both of these must be drastically reduced to reach the Paris climate targets.

Some EU nations see gas as a fuel for transition and believe it should be taxed to help fund investments in energy that will reduce dependence on coal.

This disagreement has sparked extensive lobbying by governments, and caused the Commission to delay almost a full year its gas decision.

As European gas prices rose to new records, tensions in the region have escalated. This has prompted some countries to demand a quicker shift from fossil fuels to lessen their exposure to volatile markets.