ČEZ director warns EU taxonomy plan could complicate Czechia’s energy transformation

Dukovany nuclear power plant

The current European Commission sustainable finance taxonomy proposal could bring about complications when it comes to transforming the Czech energy sector, according to ČEZ CEO Daniel Beneš. Together with the Association of Industry and Trade, he has called on the Czech state to suggest revisions to the document, especially when it comes to the sustainability deadlines on nuclear power.

A key component of the European Green Deal, the taxonomy document aims to prevent greenwashing by providing a definition of what are environmentally sustainable economic activities. This can in turn be used as a guide for investors and provide energy companies with the financial resources needed to undertake energy construction projects.

However, ČEZ CEO Daniel Beneš said on Monday that the current form of the EU taxonomy draft could throw a crucial wrench into the Czech Republic’s energy transformation plans, especially when it comes to heating plants.  The warning was also published by the Czech Association of Industry and Transport, of which Mr Beneš is vice-president.

He explained his main issue with the document to Czech Television.

“First of all it should be said that the proposal is, in principle, very good for the Czech Republic, because it classifies nuclear and gas energy as sustainable.

“However, we need to understand what exactly the European Commission means by saying that nuclear energy is sustainable only temporarily, specifically until 2040 when it comes to existing power plants and 2045 for planned facilities. We need to be clear on how the commission plans to notify any kind of investment into existing power plants, as this could have a major impact on our nuclear facilities and the extent of time for which we can use them”

Daniel Beneš | Photo: René Volfík,  Czech Radio

The document is still in its draft phase and will be discussed by EU commissioners in mid-January. In the meantime, the Association of Industry and Transport has called on the Czech government to propose amendments that would make the taxonomy more acceptable to the country’s future energy plans. These, according to the still unrevised 2015 State Energy Policy, count on gradually phasing out coal power by increasing the share of nuclear energy production from 36.9 percent to 48.8 percent and renewables up to 22.8 percent by 2040.

However, the deadlines in the current taxonomy draft could mean that the planned expansion of the Dukovany power plant would be the last nuclear power project built in Czechia that would be in line with the EU’s investment guidelines.  Furthermore, investments into the 60-year operation of existing units in Dukovany and the Temelín nuclear power station would also be under threat, according to the CEZ CEO.

Criticism of the commission’s taxonomy draft is not only coming from the Czech Republic. Germany and Austria are opposed to including nuclear energy in the EU’s sustainable finance plan altogether. Austria’s Climate Protection Minister Leonore Gewessler said her country will take the European Commission to court if it moves ahead with its plans to include nuclear energy in the EU taxonomy rules.

However, according to Czech Republic’s Ambassador-at-Large for Energy Security Václav Bartuška, such attempts are unlikely to succeed.

“Europe is a continent of compromise and what was proposed in this taxonomy draft is a compromise, which tries to balance the wishes of each member state.

“Austria knows that it will be almost impossible to block this proposal, because both the European Council and the European Parliament have refrained from having any real power in influencing this document. They have more or less given the power to the commission alone to define its contents. Only a group of 20 states could block it and that is very unlikely.

Therefore it looks like whatever ends up being approved by the commission in mid-January will be the final plan.”

Whether this ends up happening or not, it is unlikely to happen without further attempts at negotiations. The Czech Industry and Trade Minister Jozef Síkela stated on Monday that his country is currently looking for likeminded EU partners in order to negotiate better conditions in the taxonomy draft.