Taking the greenwashing out of Europe’s “green” battery – with help from the EU

The EU has recently introduced a law against greenwashing, listing requirements for various sectors and businesses that must be met for a business to be able to call itself a green or sustainable investment. The law is intended to make it easier for investors who want to ensure that the money they invest or lend goes to sustainable projects, by preventing greenwashing situations that can arise when companies can themselves define whether they are sustainable. The law, often referred to as the EU Taxonomy, has been included in the EEA agreement and thus also applies for Norway.

For hydropower, the law requires liveable conditions for the species belonging to the river, which requires some level of water flow, often combined with various mitigating techniques.

Norway’s hydropower lobby and industry claims that the country’s hydropower is «green» regardless of its negative impact on nature, but Norwegian environmental and outdoor recreation organisations are fighting with help from the EU to ensure that life in Norway’s watersheds is taken into regard.

More water in the river

With this law, several long stretches of regulated Norwegian rivers that are left barren from hydropower can get some of their water back. The European Commission has stated in a letter to the environmental organisation Sabima that, according to the new law, Norwegian hydropower cannot be categorized as green and sustainable if the power plant operates with exceptions from environmental requirements, or without a license at all.

– The law is designed to take regard of life in rivers; salmon, trout and freshwater pearl mussels. As it applies in Norway, we cannot accept strange interpretations based on the interests of the energy lobby, says Christian Steel, director of the Norwegian environmental organisation Sabima.

Nonetheless, a powerful energy lobby is working to prevent the contents of the letter from becoming official policy. Because green investments are lucrative, and Norwegian hydropower is accustomed to being called sustainable by virtue of being renewable.

Norway the exception

Norway has the European record for granting hydropower plants exemptions from the environmental requirements of the EU’s water directive. These environmental requirements presuppose, among other things, that there is some constant water flow in the affected waterway, which is obviously necessary for the continuity of life in and along the river.

– Since Norway has so much hydropower, it is extra important that we are as environmentally friendly as possible. Norway has over a thousand exemptions from the environmental requirements, Sweden has ten. Half of all exemptions in Europe are granted in Norway by the Norwegian authorities, says Steel.

Many Norwegian hydropower plants operate without having to comply with any environmental requirements, simply because the power plants are essentially antiques, from a time before you had to have a licence or permit. Environmental requirements are set in licences, which hundreds of Norwegian hydropower plants do not have.

More about the law

The EU’s new law against greenwashing does not require that all hydropower convert to more environmentally friendly operation, but is rather a clarification of what applies for a business to be considered a green investment object.

For an economic activity to be defined as environmentally sustainable according to this act, the activity:

• must contribute significantly to the achievement of one or more of the regulation’s environmental objectives:
  • Limitation of climate change
  • Climate adaptation
  • Sustainable use and protection of water and marine resources
  • Transition to a circular economy
  • Prevention and control of pollution
  • Protection and restoration of biological diversity and ecosystems
• cannot cause significant damage to any of the other environmental objectives (“Do No Significant Harm”) in line with an additional regulation/delegated legal act

Norway’s hydropower is Europe’s largest source of renewable energy- What’s the problem?

Hydropower gives us a lot of renewable energy and is an important part of a future without fossil energy. The challenge lies in producing energy without simultaneously exacerbating the biodiversity crisis, described by IPBES as being equal to, if not more dire, than the climate crisis. Hydropower involves major costs for nature, and many Norwegian hydropower plants, especially old ones – operate without sufficient environmental criteria, and have never gone through any form of environmental impact assessment.

Norwegian hydropower is based on damming watercourses, so that you get large reservoirs of water, preferably high up in the mountains. Often, the water is then released through pipes or tunnels to a power station further down, so that you get as great a fall height, and therefore power yield, as possible. Through such hydropower dams, the water from the snow melt in the spring and from rain in the autumn can be stored to produce energy the following winter. Downstream of the dam, long stretches of the river are often left completely or partially dry. Water from a river can also, through tunnels and pipes, be transferred to a power plant in another valley, thus transferring water (and possibly species) from one watershed to another.

Such interventions bring with them a list of ecological challenges in a living river system. For example, there will be no real spring flood. Instead, the water is released in small quantities throughout the rest of the year and winter. An unfortunate consequence is that there will be an unnaturally warmer and lower water level in the summer, which many species cannot tolerate, such as salmon, trout and the freshwater pearl mussel.

The dams themselves and the dry stretches of streams and rivers prevent salmon, trout, grayling, eel and other species from migrating up and down the river throughout the year or their life cycle. There are methods to help many fish species get past such migration obstacles upstream and also safely guide them past turbines, but few Norwegian power plants enact such measures.

An example of a lack of environmental consideration in Norwegian hydropower production is that after joining the European electricity market, many power plants switch production on and off based on the electricity prices. This is a different way of operating the power plants than anyone foresaw at the time they were built. This switching on and off leads to rapid and unpredictable changes in the water level. When water level in rivers suddenly drops, both large and small fish can be stranded on the dried-up bottom.

European Commission clarifications on sustainable hydropower

The law has been included in the EEA agreement and thus also applies in Norway. After some curious statements from the hydropower industry about their interpretation of the rules that would label them as sustainable regardless, we inquired with the Norwegian authorities as to whether their interpretation differed and were told that they awaited clarification from the EU.

Sabima therefore asked the EU in March 2022 to clarify how the assessment criteria for hydropower should be interpreted.

In a letter to Sabima, the European Commission clarifies the following requirements for both new and old hydropower to be considered as green:

• all plants need to have a license (permit)
• the permits should determine the conditions for achieving the environmental targets in the Water Framework Directive
• all technical and ecologically relevant measures with the aim of achieving the environmental objectives in the affected waterbodies must be implemented

The Norwegian authorities have not taken the Commission’s correspondence with Sabima in regard, and wait instead for the Commission to publish a guideline/set of Q&As regarding the taxonomy.

If the European Commission stands by its original clarifications as stated to Sabima, it will mark a big change in how Norwegian hydropower is viewed. The Norwegian industry organization Energi Norge and state-owned power company Statkraft (Europe’s largest generator of renewable energy) have until now promoted the view that all Norwegian hydropower is sustainable, regardless of the consequences for nature. Dry riverbeds, chopped up endangered eel and other fish, hundreds of species on the list of endangered species with hydropower as at least one of their main threats, price driven start-stop practice that leave old and young fish stranded and cause erosion problems, wild reindeer affected by blocked migratory routes , erosion , and hundreds of exemptions to the water framework directive – nothing has shaken them in their view that by virtue of being Norwegian hydropower, the business producing the power is somehow sustainable. We interpret the response from the European Commission as putting an end to that era.

– All Norway’s hydropower licences must set modern nature targets in a time of crescendoing biodiversity crisis. Those who don’t, would have to sell their electricity as unsustainable, and cannot be accepted under the sustainable finance taxonomy, concludes Sabima’s Steel.

Sabima’s questions to the European Commission and their response

A recent article on the matter published by the public Norwegian broadcast company NRK (Norwegian)