France mounts ‘aggressive’ nuclear push with eye on EU industrial plan

Paris looks out for its atomic industry as the sector faces a crossroads.

  POLITICO EU BY VICTOR JACK, FEBRUARY 17, 2023 

With its atomic industry at a crossroads, France is mounting a lobbying blitz to put nuclear energy on par with renewables in EU climate legislation — and unlock benefits from the bloc’s upcoming plans to boost green industries.

Paris argues that if the ultimate goal of the EU's climate targets is to decarbonize the bloc, that should mean nuclear plants, with their negligible CO2 emissions, have a key role to play alongside renewables.

But that push — and attempt to reposition nuclear as a green technology — is also a strategy to strengthen Paris’ hand down the line in accessing cash from the bloc’s upcoming mammoth industrial strategy, six diplomats told POLITICO.

“They’re trying to get nuclear everywhere where it doesn’t fit … to have policy lock-in,” said one EU diplomat who spoke on condition of anonymity, adding: “Everybody is a little annoyed at the French — it’s very aggressive.”

The move is designed to “build leverage for other arguments” down the line, a second EU diplomat said.

Asked whether France expects nuclear to be counted as a “clean technology” in the upcoming industrial plan and therefore benefit from it, a senior French energy ministry official told POLITICO that “the [EU sustainable investment rules] recognize the fact that nuclear … is a technology that contributes to the transition.” 

“So in absolute terms, it seems to us that this question already has an answer.”

Small victory, bigger problem

Paris notched a first victory last week on the EU’s long-awaited rules governing what counts as “renewable hydrogen.”

Unlike most other countries, hydrogen producers in France will be able to count the electricity taken from the grid as renewable as long as they also sign a long-term power contract with an existing renewables provider. The exception was made because 70 percent of France's electricity comes from low-emissions nuclear.

But this promotion of nuclear-powered hydrogen — also known as “pink” or “low-carbon” hydrogen — is only one part of France’s broader push to inject atomic energy into EU green policy files, in which it has so far been less successful.

In late January, Paris attempted to insert low-carbon hydrogen into a renewables cooperation partnership with Ukraine, but was ultimately overruled.

It also led a push alongside eight other EU countries this month for pink hydrogen to be included in the EU’s Renewable Energy Directive, arguing that it should contribute toward 2030 targets for greening transport and industry.

The Golfech EDF nuclear plant at night in southwestern France | Charly Triballeau/AFP via Getty Images

When it didn’t get its way, France accused Spain and Germany of reneging on promises to recognize the role of low-carbon hydrogen.

“It would not be understandable for Spain and Germany to take different positions in Brussels and not keep their commitments,” French Energy Minister Agnès Pannier-Runacher told reporters last week.

Atomic needs

The push comes as experts predict France’s electricity demand will rise sharply as the country electrifies to meet its climate goals, and its ageing nuclear fleet declines. 

Historically an exporter of electricity to its EU neighbors, France last year was forced to import power to meet its consumption needs as half its nuclear fleet was forced into maintenance due to corrosion and other technical problems.

And with the country’s largest utility EDF announcing a nine-month halt to another nuclear reactor earlier this month, that leaves two-fifths of its reactors still out of action.

“A lot of these nuclear reactors are ageing,” said Carlos Torres Diaz, senior vice president and head of power at Rystad Energy, a consultancy, who predicts some will be decommissioned already “in the next decade.”

Add to that French electricity demand is set to rise from 417 to 715 terawatt-hours by 2030, Torres Diaz said, meaning “there will need to be some investments.”

Paris is clearly aware of the challenge. In a sharp U-turn from his previous policy, President Emmanuel Macron announced plans to build six new reactors last February, with an eye on building eight more.

But that won’t come cheap, with new nuclear plants typically costing “billions,” Torres Diaz said. “If they need to renew all this ageing capacity then they will need to get the funding ... If it’s not a green source of energy they will struggle to get some financing.”

That's where the EU’s Green Industrial Plan comes in.

Announced last month, the upcoming plan is Brussels' attempt to help the bloc go toe-to-toe with the United States’ $369 billion Inflation Reduction Act with a range of tax relaxations and new industrial benchmarks for 2030.

From the proposed European Sovereignty Fund, to more state aid allowances and potentially a competitive auction for a 10-year fixed-rate renewable hydrogen contract, there’s ample opportunity for France to cash in.

With the discussion still in its early days and specific language on policy not yet nailed down, that gives France an opening to stake out its position.

In the planned Net-Zero Industrial Act, for example, which aims to slash red tape on “net-zero” technologies, the “precise product scope [of the technologies] remains to be defined,” according to the European Commission.

Marion Labatut, EDF’s deputy director of EU affairs, agreed “it would be good” if nuclear were included in the upcoming strategy. She added that the utility would be interested in accessing the Commission’s hydrogen auction, for example.

And while France is likely to face resistance from nuclear-skeptic countries including Germany and Luxembourg, recent diplomatic efforts indicate Paris is not likely to give up easily.

In fact, pink hydrogen was on the agenda during the first official meeting between Commission President Ursula von der Leyen and French Prime Minister Élisabeth Borne on Thursday.

Overall, this push “is very unsurprising,” a third EU diplomat said. “The French are very skilled at using crises to push their own strategic policies ahead.”