* Expert group to give feedback on EU proposal by Friday
* Draft rules 'not well suited' to green financial products
* Chief of EU advisers flags concerns over draft proposal (Updates with European Commission comment)
By Simon Jessop and Kate Abnett
LONDON/BRUSSELS, Jan 17 (Reuters) - Experts advising on the European Union's sustainable finance taxonomy are concerned a draft plan to include gas and nuclear relies too heavily on promises to make those fuels green in future, rather than assessing their real impact today.
Nathan Fabian, who chairs the expert group, said some advisers were concerned the draft risked hurting the taxonomy's mission to provide clarity to investors about the environmental impact of investments.
"The new criteria do have weaknesses that mean that they're not well suited to sustainable finance products," Fabian told Reuters on Monday, ahead of a Friday deadline for the group to give feedback on the European Commission's draft proposal.
Under the draft plan, seen by Reuters, gas plants can earn a green label if they meet criteria including an emissions limit of 270g of CO2 equivalent per kWh, or if their annual emissions average 550kg CO2e per kW or less over 20 years.
That would judge the environmental performance of a gas plant over 20 years, with no guarantee that its emissions would drop over time, said Fabian, who is also Chief Responsible Investment Officer at the UN-backed Principles for Responsible Investment.
"So it's possible to have very high emissions in the start and then for the asset simply to fall out of taxonomy alignment later in its life but still operate," he said.
That could also throw up problems for asset managers who choose to assess the taxonomy alignment of activities in a fund based on revenue - since they would be assessing an activity's current revenue based on the activity's expected green credentials decades into the future.
"If I invest in the turnover of that plant today, I've effectively got taxonomy alignment from very high emissions - and that is a mismatch in what the financial product can claim and what the objective of these criteria are," Fabian said.
A Commission spokesperson said the taxonomy would only recognise investments that commit to accelerating the EU's green transition.
"The inclusion of nuclear or natural gas comes with clear and tight conditions associated with its use in line with our climate targets and with safeguards against significant environmental harm," the spokesperson said.
Fabian also said the draft rules for nuclear have raised questions among the advisers, including whether a plant can guarantee its green credentials today, if its obligation to manage nuclear waste - one of the main environmental concerns about the fuel - does not kick in until as late as 2050. (Editing by Jane Merriman)
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