In a historic vote for Europe's climate and energy policies, with reverberations across the planet, the European Parliament recently approved that some projects for the production and distribution of gas and nuclear energy can be classified as "green". This is not just a semantic issue: reclassification frees up hundreds of billions of euros in low-interest loans and even state subsidies for these projects. For BlockC CEO Carlos Martins, one of the most experienced Brazilian professionals in the market for carbon credits, environmental assets and green investments, the decision is a reality check in environmental activism. “Unfortunately, there is no immediate replacement for coal for large-scale energy generation other than nuclear energy or natural gas”, says Martins.
At the heart of this discussion is what European lawmakers call the “European Union Taxonomy”. This classification of products, services and economic activities aims to guide investment in projects in line with the bloc's goal of halving its emissions by 2030 and being carbon neutral by 2050. Next, we heard from Block's CEO about the impacts and repercussions of vote.
What does the European Parliament's decision to include natural gas and nuclear energy represent as “green” sources?
First of all, a reality check in environmental activism. After a global inflationary surge, several countries in the world are entering recession, and it makes no sense for poor countries to pay for energy prices simply because Germany has started shutting down its nuclear plants. There is no immediate replacement for coal for large-scale power generation other than nuclear power or natural gas. It's worth a Nobel Prize to anyone who can come up with another solution. Renewable energy sources are intermittent. When there is no wind, there is no wind power generation. At night or on cloudy days, there is no solar power generation. This does not delay the energy transition to renewable sources, it simply shows a reality.
Many critics of that decision say that embracing natural gas at this point will favor Russia. And that nuclear power is a historical step backwards.
The European Parliament has placed some impediments to what we call the lock-in of natural gas technology. This is an extension of the originally planned period, between 10 and 15 years, for the natural gas plants to be shut down. Therefore, the decision does not mean embracing natural gas, but adapting the European energy transition to reality in technological terms. The backlash against the use of nuclear energy is a holdover from hippie pacifism. According to official Japanese government sources, only 1 person died from the effect of direct radiation in the Fukushima accident, caused, it is worth remembering, by the largest tsunami that hit the coast of Japan in the modern era and the second largest hurricane of all time. Nuclear is the safest source in terms of generated energy. Furthermore, according to the International Energy Agency, operating nuclear plants built decades ago are already amortized and therefore provide the cheapest energy, costing only US$ 30 per megawatt hour. However, building new nuclear plants in Europe today is expensive mainly because activists and politicians have decided that they will stop it at all costs, within what Francis Fukuyama called the “vetocracy” of Western civilization. On the other hand, building nuclear power plants in China and South Korea is faster and cheaper because these moves don't exist there.
Activists such as Greta Thunberg argue that this reclassification of some nuclear and gas and natural projects will delay Europe's green transition. Do you agree with this?
Activists are very good at spotting trends. We owe them the sense of urgency to deal with climate change. But activists are less effective in proposing alternatives to solving our environmental problems. I like to use data from the UN's own Panel on Climate Change, the IPCC, the highest authority on the subject. In the IPCC assessment report number 5, dated 2014, on page 1329 table AIII-2 it is possible to see that, during the entire life cycle of a nuclear power plant, it emits 12 kilograms of CO2 per megawatt hour. A wind farm emits 11 kilograms of CO2 per megawatt hour. A solar plant emits 48 and a natural gas plant 490. Coal plants, on the other hand, emit 820 kilograms of CO2 per megawatt hour. If we are experiencing a climate emergency and we need to shut down coal-fired power plants, nuclear energy is a low-CO2 alternative to all fossil sources and comparable to wind energy. Are we going to follow the IPCC science or not?
Does this decision affect the expansion of green businesses in Brazil? In what way?
This decision is good for the world, because someone needs to generate electricity at the base. That is, providing electricity when the wind is weak or at night. This decision puts nuclear power back in the game. It in no way delays the evolution of green business in Brazil, because it simply re-establishes a reality that environmental activists insist on trying to deny without scientific backing and based on prejudice.