Investments in nuclear and natural gas projects can be labelled sustainable under certain conditions, the European Commission has announced in the face of massive opposition.
"Today's delegated act may be imperfect but it is a real solution. It moves us further towards our ultimate goal of carbon neutrality," European Financial Services Commissioner Mairead McGuinness said in a Brussels press conference on Wednesday.
The deeply contested legislative update will enter into force in four to six months unless a majority of EU member states or the European Parliament objects.
It aims to channel private investments to help the European Union meet its 2050 climate goal of "net zero" greenhouse gas emissions through energy sector reform.
The move comes despite deep division between EU member states, a backlash from environmental groups and criticism from the private sector.
McGuinness also moved to quash speculation of division within the European Commission itself over the taxonomy, saying the decision was "overwhelmingly" approved by her fellow EU officials.
Opponents argue that gas and nuclear energy are not environmentally friendly, but the commission views them as crucial bridging technologies towards renewable energy sources.
"We do need to use all the tools at our disposal to achieve climate neutrality because we have less than 30 years to get there," McGuinness said in defence of their inclusion.
The commissioner added that Wednesday's decision "is not the end, but today is a means to an end.".
Under the agreed taxonomy, investments in new gas-fired energy plants before 2030 are classified as environmentally friendly if emissions total less than 270 grams of carbon dioxide (CO2) per kilowatt hour.
For investments in nuclear energy to be included, a power plant must be up to the latest technological standards and have an approved plan for atomic waste disposal in operation by 2050 at the latest.
Long term risks
Critics charge however the long-term risks of radioactive waste and environmental damage outweigh any absence of carbon emissions and argue fossils fuels like gas have no place at all in the taxonomy.
The environmental group Greenpeace accused the commission in a statement of an "attempted robbery" of climate funds with its "anti-science plan."
The EU executive is "trying to take billions of euros away from renewables and sink them into technologies that either do nothing to fight the climate crisis, like nuclear, or which actively make the problem worse, like fossil gas," Greenpeace campaigner Ariadna Rodrigo said in the press release.
The World Wildlife Fund said that EU officials had capitulated to lobbying from Poland, Hungary and France in particular, and warned the changes would unleash a "tsunami of greenwashing."
Greenwashing is the misrepresentation of practices labelled as more environmentally friendly than they are.
Support from EU member states for the taxonomy reflects different economic priorities and how countries generate energy - with different governments split between support for nuclear, gas or renewables.
France, one of the world's major producers of nuclear power, had pushed hard for the taxonomy to include nuclear energy with support from Poland and Hungary.
Germany on the other hand has a strong pro-gas stance but opposes nuclear and Berlin has insisted on making the criteria for gas investments more flexible with some success.