* Draft rules suggest EU to stick with tough emissions limit
* Follows intensive lobbying from energy industry
* Rules on nuclear power to be added later
By Kate Abnett and Simon Jessop
BRUSSELS/LONDON, Oct 29 (Reuters) - Power plants fuelled by
natural gas will not be classed as a sustainable investment in
Europe, unless they meet an emissions limit that none currently
comply with, according to draft European Union regulations seen
by Reuters.
The landmark EU rules, due to be finalised this year, will
force providers of financial products to disclose from the end
of 2021 which investments meet climate criteria, and can
therefore be marketed as "sustainable".
The aim is to steer billions of euros in much-needed private
funding into low-carbon projects to help the EU hit ambitious
climate goals, and limit so-called greenwashing by stopping the
labelling of investments that do not meet the criteria as
"green".
The draft rules say that to be classed as a sustainable
investment - one that makes a "substantial" contribution to
curbing climate change - gas power plants must not produce more
than 100 grams of CO2 equivalent per kilowatt hour.
Even Europe's most efficient gas plants produce more than
three times this limit, according to estimates by industry and
independent climate think tank Ember.
To comply, plants could use carbon capture and storage (CCS)
technology - currently, no European gas plants do so, although
companies such as Equinor and Shell are
developing local CCS projects in industrial sectors.
"The gas lobby has had its core request conclusively
rejected," said Rebecca Vaughan, an analyst tracking industry
lobbying for InfluenceMap.
Gas industry groups ramped up lobbying efforts after most
gas plants and pipelines were excluded from a provisional list
published in March. Companies including BP, Total
and Equinor signed an open letter to EU leaders this
month calling for the green finance rules to build on the
existing gas market and network as the backbone of the bloc's
future energy system.
The Commission declined to comment on the draft rules, which
are subject to change before publication.
The rules would not ban companies from investing in projects
that don't meet the EU's "sustainable" criteria but industry
groups have warned that excluding gas plants could mean they
will struggle to raise finance - even for investments to reduce
emissions.
The EU rules use a tighter emissions limit than the 250g of
CO2 per kwh threshold used by the European Investment Bank to
screen investments. The EIB will stop financing unabated fossil
fuel projects by end-2021.
"Having a threshold that is not in line with the EIB
suggests a lack of joined up rules between public and private
lending, which is perverse," Eurogas Secretary General James
Watson told Reuters.
The draft rules would label certain pipeline investments as
sustainable - including refurbishments to enable gas pipelines
to carry more low-carbon gases like hydrogen, or repairs to plug
methane leaks.
However, investments in new pipelines would only count as
sustainable if they are dedicated to transporting low-carbon
gas.
Rules on nuclear power investments will be added following a
Commission analysis.
(Reporting by Kate Abnett, Simon Jessop; Editing by Kirsten
Donovan)
BP (BP.)
