Simon Jessop, Kate Abnett

(Reuters) – After a year-long fight between governments about which investments are really climate friendly, the European Union now plans to designate some of its nuclear energy projects as green investments.

In January, the European Commission will propose rules to decide whether nuclear and gas projects are included in the EU’s “sustainable finance taxonomy”.

It is a listing of all economic activity and their environmental criteria that they have to meet in order to be considered green investments. The system restricts the use of the term “green” to projects that are truly environmentally friendly. It also aims to increase the appeal to private capital and to stop investors or companies “greenwashing”, which overstates their environmental credentials.

Brussels is also moving to apply EU taxonomy in some EU funding. The rules may determine the eligibility of projects for specific public financing.

Reuters has seen a draft of the Commission’s proposal. It would declare nuclear power plant investment as green if there is a plan and funds, and a place to dispose of radioactive material safely. For a new nuclear plant to be declared green it must have a construction permit before 2045.

Natural gas power plants are also considered green investments if they emit less than 270g CO2 per kilowatthour, can replace more polluting fossil fuel plants, and obtain a permit for construction before December 31, 2030. Other conditions must be met, including the ability to burn low carbon gases.

Gaz power generation is considered green because it’s a transitional activity. This means that while the emissions are below the industry average, and the polluting assets don’t change with the switch to cleaner energy.

It was impossible to contact the Commission immediately for comments.

The draft proposal will be reviewed by the EU and an expert panel. It could be changed before publication, due for publication later in January. The proposal can be rejected by either the majority of EU member countries or the European Parliament once it is published.

For more than one year, the policy was hampered by lobbying from government officials. EU countries differ on what fuels are sustainable.

While natural gas is half as CO2-emitting as coal, it can also be used in power plants to produce methane. This gas, however, has a lot of potential for warming the planet.

Expert advisors from the EU had suggested that gas plants should not be considered green investments until they meet a lower 100g CO2/kwh emission limit. This was based on deep cuts in greenhouse gases scientists believe are necessary to prevent catastrophic climate change.

Although nuclear power emits very little CO2, the Commission sought advice from experts this year to determine if the fuel should still be considered “green” given the environmental consequences of radioactive waste.

Brussels completed the regulations last year in respect of parts the green list, including transport and buildings. From this month onwards investments that are not in the taxonomy will no longer be considered climate-friendly within the EU. Later, the gas and nuclear rules are set to take effect.