Excludes Nuclear Power from Green Finance Taxonomy
The South Korean government has decided not to include nuclear power generation in its green finance taxonomy. This is opposite to the United States’ and the European Union’s recent decisions.
At present, the draft of the taxonomy of green industries includes the 27 fields including solar power generation and wind power generation. The government is to finalize and announce it next month after a public hearing this month.
The taxonomy is to define and classify environmentally sustainable economic and industrial activities. It is to promote public and private investments in green industries. Down the road, enterprises must disclose statistics on their green assets and green investment activities based on the taxonomy. This means that it will directly affect their investment attraction and financing costs in the future.
The European Union, which is leading the establishment of such taxonomies, recently classified nuclear power generation as a green industry. The same move for greenhouse gas reduction and carbon neutrality is being adopted by the United States, Japan and China.
According to those in the industry, the South Korean government made the decision for political reasons and it will disrupt the development of the industry with huge potentials. “Besides, the decision will hamper essential investments in the industry, including that for small modular reactor development,” one of them explained, adding, “This is because government budget spending to that end will be hindered and SMR developers will suffer disadvantages in the process of financing.”