EU Court: Investments In Nuclear Energy and Natural Gas Can Qualify As Sustainable

On September 10, 2025, the European Court of Justice held that the European Commission was entitled to take the view that nuclear and gas-fired power can be classified as sustainable investments under the EU's Taxonomy Regulation.

The EU adopted the Taxonomy Regulation in 2020 to facilitate sustainable investments. It provides criteria for determining whether an economic activity qualifies as environmentally sustainable. The Commission established in a delegated regulation on the basis of the Taxonomy Regulation technical screening criteria to include certain activities in the nuclear energy and natural gas sectors in the category of activities contributing substantially to climate change mitigation or climate change adaption. Austria, supported by Luxembourg, challenged this delegated regulation in front of the EU's General Court.

In its judgment on September 10, 2025, the Court held that the Commission did not exceed its powers by including nuclear energy and natural gas in the sustainable investment scheme. In particular, the Court held that the Commission was right to take the view that nuclear energy generation has near to zero greenhouse gas emissions and that there are currently no technologically and economically feasible low-carbon alternatives to cover the energy demand in a continuous and reliable manner. 

On the other hand, the Court mentioned the possibility that economic activities in the nuclear and natural gas sectors could, under certain conditions, contribute substantially to climate change mitigation and climate change adaption. The decision can still be appealed.