Austria loses fight against EU labeling nuclear and gas 'green'

(CN) — Austria lost its battle on Wednesday to stop nuclear power and fossil gas from being branded “green” in Europe.

The EU’s General Court threw out Vienna’s challenge, siding with the European Commission’s move to treat both as transitional investments in the bloc’s sustainable finance rulebook.

The ruling wraps up one of the EU’s fiercest climate fights. At the heart of it was the bloc’s taxonomy, a system meant to channel billions into projects that truly match Europe’s pledge to cut emissions and hit net zero by 2050 — essentially balancing what goes into the air with what gets taken out.

When Brussels decided in 2022 to count nuclear and fossil gas as green, Austria took the commission to court, with Luxembourg at its side. They argued the label would damage the taxonomy’s credibility and lock in harmful technologies. On the other side, Brussels was backed by 10 countries including France, Poland and Hungary.

On Wednesday, the judges shot down Austria’s challenge. They said the commission has broad leeway when dealing with complicated science and policy, and that nuclear and gas can count as transitional activities as long as they meet strict safety and environmental conditions meant to keep them in check.

As the judges put it, “nuclear energy generation has near to zero GHG emissions and there are no technologically and economically feasible low-carbon alternatives at a sufficient scale to cover the energy demand in a continuous and reliable manner.” They also made clear that the commission had not made any obvious mistakes in reaching that conclusion.

Austria had countered that nuclear should never have been labeled green, pointing to the dangers of radioactive waste, reactor accidents and the strain nuclear plants put on water supplies in a warming world. It also said fossil gas ran against Europe’s Paris Agreement promises, even when capped at 270 grams of emissions per kilowatt-hour.

The court brushed those arguments aside, noting the commission had leaned on extensive expert studies and that “the Republic of Austria has failed to demonstrate that the commission made a manifest error of assessment.”

On fossil gas, the judges signed off on the contested limits, pointing out they come with strings attached: New plants have to replace coal, slash emissions by 55% over their lifetime and fully switch to renewable or low-carbon gases by 2035. Put together, the court said, those conditions keep the rules in line with the EU’s climate path.

The ruling keeps the commission’s decision in place, confirming that nuclear and gas can still count as “green” investments, but only if they meet tough conditions.

Austria’s climate minister, Norbert Totschnig, called the ruling “very regrettable,” arguing that nuclear power does not meet the test of ecological sustainability and that natural gas should serve only as a stopgap in the energy transition. He said Austria is convinced the shift can be achieved entirely through renewables, thanked Luxembourg for standing with Vienna in the case and noted the government will review the judgment before deciding on next steps, including a possible appeal.

The European Commission struck a different note. “The General Court has upheld the legality of the commission delegated act on inclusion of nuclear and fossil gas energy generation activities in the EU taxonomy,” a spokesperson said, adding that the rulings also confirmed the sustainability standards laid down in the regulation.

The judges, for their part, stressed that it was not their role to revisit political choices already made by EU lawmakers. Their job was simply to check whether the commission had acted within its legal powers, and they concluded it had stayed well within those limits.

Speaking before the ruling, Merijn Chamon, professor of EU law at Vrije Universiteit Brussel, noted that the case could shed light on “the commission’s duty to perform impact assessments and to consult the public when developing regulations, the precautionary principle and the scope of its power under Article 290 TFEU to supplement formal legislation.” He added that the court was likely to “go into the substance” since the challenge came from a member state rather than private parties.

Though the legal questions are settled for now, the political fight over Europe’s green investment list isn’t going away anytime soon.

Groups like Greenpeace, WWF and ClientEarth have slammed the decision as greenwashing. They warn it could drain money away from renewables and keep Europe tied to old technologies longer than it should.

Supporters see it very differently. Industry players and pro-nuclear governments — led by France and several Eastern European countries — argue the move gives investors clarity and helps keep the continent’s energy supply steady.

“The EU taxonomy is, at its core, a science-based framework that could genuinely help steer us toward climate neutrality,” said Christian Klein, chair of sustainable finance at the University of Kassel. “But the inclusion of nuclear and gas was a purely political choice that undermines public trust — it is hard to see, for example, how nuclear energy could ever meet the ‘do no significant harm’ test in the context of a circular economy.”

For Brussels, the ruling brings some relief but also underlines just how divisive Europe’s climate agenda still is. The taxonomy was meant to set one clear standard for green investments across the bloc. In practice, it has exposed sharp rifts between member states over what really counts as sustainable.

Austria and Luxembourg now face an uphill climb if they want to overturn the judgment. They have two months and 10 days to appeal to the EU’s top court, the Court of Justice. Such appeals rarely succeed, but politically the fight may be far from over.

Courthouse News reporter Eunseo Hong is based in the Netherlands.