According to Chancellor of the Exchequer Jeremy Hunt, nuclear power would be categorised as “environmentally sustainable” under the UK’s impending green taxonomy, giving it access to the same investment incentives as renewable energy.
The statement came as part of Chancellor Hunt’s inaugural budget speech, in which he stated that nuclear would provide a “critical source of cheap and reliable energy,” and that “increasing nuclear capacity is vital to meet our Net Zero obligations.”
The initiative to develop a green taxonomy was launched in 2020 by then-Chancellor Rishi Sunak to provide a common framework for determining which activities are environmentally sustainable and to improve understanding of the impact of firms’ activities and investments on the environment while supporting the transition to a sustainable economy. The policy was supposed to become law in late 2022, but it has now been pushed back until at least later this year.
The UK’s Taxonomy initiative follows the recent passage of the EU Taxonomy, which included nuclear power. However, the addition of nuclear and gas proved controversial, with some member states and the European Commission’s own sustainable finance advisory group opposing their inclusion, citing issues such as potentially adversely affecting other taxonomy objectives such as circular economy, pollution prevention, and water and marine, as well as potential long-term problems.