Carbon Emissions: Finance

Treasury written question – answered on 22nd July 2021.

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Photo of Charlotte Nichols Charlotte Nichols Shadow Minister (Equalities Office)

To ask the Chancellor of the Exchequer, if he will publish the advice he received on the exclusion of nuclear energy from the Green Financing Framework.

Photo of Charlotte Nichols Charlotte Nichols Shadow Minister (Equalities Office)

To ask the Chancellor of the Exchequer, what assessment he has made of the implications of the Barclays report, Nuclear for a decarbonized future, published on 2 June 2021 for the Green Financing Framework.

Photo of Charlotte Nichols Charlotte Nichols Shadow Minister (Equalities Office)

To ask the Chancellor of the Exchequer, with reference to the Green Financing Framework, what assessment he has made of the implications for his policies of the conclusion in the report by Barclays, entitled Nuclear for a decarbonized future, that nuclear is net zero.

Photo of Charlotte Nichols Charlotte Nichols Shadow Minister (Equalities Office)

To ask the Chancellor of the Exchequer, with respect to the Green Financing Framework, what assessment he has made of the potential implications for his policy of the Climate Bonds Initiative’s inclusion of nuclear energy in its Climate Bonds Taxonomy.

Photo of Charlotte Nichols Charlotte Nichols Shadow Minister (Equalities Office)

To ask the Chancellor of the Exchequer, if he will take steps to reconsider the exclusion of nuclear energy from the Green Financing Framework in respect of the International Capital Markets Association Green Bonds Principles which include nuclear energy.

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. 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.

Nuclear energy is excluded from the UK Government Green Financing Framework, which 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.

Only two sovereigns (The Netherlands and Nigeria) have so far certified their green bonds with the Climate Bonds Initiative Taxonomy – neither of whom included nuclear energy in their frameworks.

The Barclays report on nuclear energy aligns with what is stated in the UK Government Green Financing Framework: that nuclear power will play an important role in achieving net zero. The framework however does not stipulate what the Government considers to be green and what is not – this will be the role of the UK Taxonomy. Recognising however that many sustainable investors currently have exclusionary criteria in place around nuclear energy, the UK Government will not finance any nuclear energy-related expenditures under the Green Financing framework.

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