On Wednesday, September 10, 2025, the European Union’s General Court delivered a verdict that has reignited fierce debate across the continent: Austria’s legal challenge to the EU’s classification of nuclear energy and natural gas as climate-friendly investments has been dismissed. The ruling, which sides with the European Commission, paves the way for both energy sources to remain listed in the EU’s influential “taxonomy” of sustainable economic activities—a decision with far-reaching implications for the bloc’s climate ambitions, investment flows, and political landscape.
The case, brought by Austria in 2022, centered on the European Commission’s controversial move to include nuclear and gas in the taxonomy—a classification system designed to steer billions of euros in private investment toward projects that help meet the EU’s ambitious climate goals. The taxonomy, which forms part of the EU Action Plan on Sustainable Finance, sets out six environmental objectives, including climate change mitigation and adaptation, and establishes strict criteria for what can be labeled as a sustainable investment.
Austria, a country with a longstanding policy against nuclear power and no operational nuclear plants, argued that including gas and nuclear energy in the taxonomy amounted to “greenwashing” technologies that are, in its view, neither safe nor environmentally benign. The country’s environment ministry called the court’s decision “very regrettable,” maintaining, “We were and remain of the opinion that nuclear power does not meet the criteria for environmental sustainability. Fossil gas will also only play a temporary role in the energy transition.” Austria is now considering its next steps, including a possible appeal.
The court, however, sided with the Commission, stating that “the EU Commission was entitled to take the view that certain economic activities in the nuclear energy and fossil gas sectors can, under certain conditions, contribute substantially to climate change mitigation and climate change adaptation.” According to reporting from Reuters, the judgment emphasized that the Commission did not exceed its authority by including these sectors and that the regulation takes a gradual approach to reducing greenhouse gas emissions, while also ensuring security of energy supply.
The Commission’s position is that nuclear power, while not typically grouped with renewable sources like wind or solar, generates electricity with near-zero greenhouse gas emissions. However, as noted by the Associated Press, nuclear energy is not without environmental concerns: mining and processing uranium is energy-intensive, reactors generate radioactive waste, and the risk of accidents remains a persistent worry. Natural gas, for its part, emits less carbon than coal but still contributes to global warming when burned for electricity.
The inclusion of gas and nuclear in the taxonomy has divided EU member states. Countries such as Spain and Denmark have argued that it undermines the credibility of the EU’s green finance framework to label gas—a fossil fuel—as climate-friendly. Meanwhile, Poland and Bulgaria, among others, have backed the rules, seeing investments in gas as a pragmatic step to help wean their economies off even dirtier coal. According to the European Commission, the classification system is already being used by companies to plan hundreds of billions of euros in green investments.
The legal battle had its origins in a late-night move by the European Commission on New Year’s Eve 2021, when a draft proposal to include nuclear and gas was quietly circulated among member states. Leonore Gewessler, Austria’s then-environment minister and now leader of the Austrian Greens, spearheaded the legal challenge. In an interview with Euractiv, she recalled, “Austria’s position was crystal clear: the taxonomy must make clear what harms the climate and what does not. Because if it says green on the label, it must also be green inside.”
Gewessler’s criticism of the court’s decision was pointed and unequivocal. “This ruling sends a disastrous signal to the entire EU,” she said in a statement reported by the Associated Press. “If this decision stands, it undermines a fundamental principle: where it says green, it is no longer truly green. Those seeking green investments may end up supporting nuclear power or dirty gas.” She further described the verdict as “a eulogy for the fossil fuel era,” arguing that the court’s reasoning—that clean, climate-friendly energy sources are not yet available in sufficient quantities—“makes no sense, economically or factually.”
Gewessler’s concerns are not isolated. Luxembourg supported Austria’s case, while Bulgaria, the Czech Republic, France, Hungary, Poland, Romania, Slovenia, Slovakia, and Finland backed the Commission. The Brussels-based trade association for the nuclear energy industry in Europe, nucleareurope, welcomed the court’s decision, arguing that inclusion in the taxonomy will encourage private investment in nuclear projects, which they say is vital for Europe’s energy transition and climate goals.
The taxonomy regulation itself, which came into effect in 2022, was designed to help the EU reach climate neutrality by 2050—a target that requires slashing greenhouse gas emissions and ramping up investment in clean technologies. The Commission’s regulation to include certain nuclear and fossil gas activities as “transitional” was an acknowledgment of the different starting points and energy mixes across the bloc. As the court noted, the regulation aims for a gradual reduction in emissions, providing flexibility for countries still heavily reliant on coal or without the capacity to rapidly scale up renewables.
Yet, for critics like Gewessler and many environmental advocates, the risk is that the “green” label is diluted, and precious resources are diverted from truly sustainable solutions. “Every euro we invest in reactors today is money that is not available for expanding the solutions we already have and that could be available tomorrow, namely solar, wind, hydro and geothermal,” Gewessler told Euractiv. She contended that nuclear energy is “too expensive, it’s too slow,” and simply cannot compete with renewables.
The court’s decision also comes at a moment of mounting political tension over the EU’s Green Deal and broader climate agenda. Gewessler acknowledged that attacks on the Green Deal are intensifying, but insisted that the fight is far from over: “That is why we need countries like Austria, which are not giving up the fight against nuclear power, and countries like Denmark, which are fighting for the 2040 climate target.” She dismissed the notion that Europe is on the verge of a “nuclear age,” asserting that “the nuclear lobby has promised us this a hundred times and never delivered, simply because all the rational facts speak against it.”
As Austria weighs whether to appeal the court’s ruling, the broader debate over what counts as “green” in Europe is unlikely to subside. With hundreds of billions of euros in sustainable investment at stake—and the EU’s credibility as a global leader on climate action hanging in the balance—the ruling marks not an end, but a new chapter in Europe’s ongoing struggle to define its energy future.
