Nuclear Power: Finance

Treasury written question – answered on 21st July 2021.

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Photo of Sarah Champion Sarah Champion Chair, International Development Committee, Chair, International Development Committee

To ask the Chancellor of the Exchequer, with reference to the International Capital Markets Association Green Bonds Principles including nuclear energy, and the Government’s Green Financing Framework excluding nuclear energy, if he will reconsider the exclusion of nuclear energy from the Green Financing Framework.

Photo of John Glen John Glen Minister of State (Treasury) (City), The Economic Secretary to the Treasury

The government recognises that reaching net zero emissions by 2050 will require power to be generated from low carbon sources. As set out in the Government’s Energy White Paper last autumn, nuclear power will play an important role in achieving net zero. The UK Government Green Financing Framework explicitly states that nuclear power is, and will continue to be, a key part of the UK’s low-carbon energy mix.

Some energy sources have been excluded from the UK Government Green Financing Framework, including nuclear energy. This is in line with current international market standards for sovereign green bonds. The Green Bond Principles published by the International Capital Market Association do not address the question of nuclear energy. All other major sovereigns have explicitly excluded nuclear energy in their green bond frameworks.

The UK Government Green Financing Framework does not represent an assessment of what the government considers ‘green’ or affect an expenditure’s eligibility for traditional financing instruments. We will review the framework on a regular basis with the aim of adhering to best practices in the market.

The Government is developing a UK green taxonomy, which will create a shared understanding of which economic activities count as environmentally sustainable and will establish an Energy Working Group to provide expert advice on the treatment of energy in the taxonomy, including nuclear power.

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