Austria loses legal challenge to EU's 'green' gas and nuclear rules

BRUSSELS, Sept 10 (Reuters) - Austria lost a legal challenge against European Union rules that class nuclear energy and natural gas as climate-friendly investments on Wednesday, as Europe's second-highest court sided with the EU over the rules.

In the case before the Court of Justice of the European Union's General Court, Austria's government had challenged the European Commission's decision to include gas and nuclear in the EU's "taxonomy" of investments that can be labelled and marketed as sustainable in Europe.

The court sided with Brussels, in a ruling which said 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."

The Austrian ministry for environment said the ruling was "very regrettable".

"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."

It added that it would now examine the ruling and then decide on possible further steps, "including whether to lodge an appeal."

The EU's inclusion in 2022 of gas and nuclear in the taxonomy has exposed deep rifts between countries over which energy sources to use to meet climate change goals.

Countries including Spain and Denmark had argued it was not credible to label gas, a CO2-emitting fossil fuel, as climate friendly. Poland and Bulgaria were among those who sought rules supporting investments in gas, to help them quit more-polluting coal.

Austria's legal action, submitted to the EU's general court by a previous coalition government in which the Greens ran the environment ministry, had argued Brussels should annul the rules on grounds including that nuclear energy cannot meet a requirement to "do no significant harm" to the environment because of concerns about radioactive waste.

Austria has a long-standing policy against the use of nuclear power.

The European Commission did not immediately reply to a request for comment.