By Kate Abnett and Simon Jessop
BRUSSELS/LONDON (Reuters) - The European Union plans to delay a decision on whether to label natural gas power plants as a sustainable investment in landmark green finance regulations due to be published next week, according to a draft document seen by Reuters.
The European Commission is due to publish on April 21 the first section of its "sustainable finance taxonomy," a long list of economic activities plus the specific rules they must meet to be labelled as green investments in the EU.
Among the most contentious issues is whether to label natural gas, a fossil fuel, as green.
EU countries are split between those who say that would be greenwashing, and those who see gas as crucial for them to quit more-polluting coal.
The Commission looks set to delay a decision, after multiple draft proposals failed to bridge that divide.
The Commission will put forward a separate proposal in the fourth quarter to address "how certain economic activities, primarily in the energy sector, contribute to decarbonisation," it said in a draft document, dated April 14 and seen by Reuters.
That will allow a "transparent debate" by EU countries and the European Parliament on the role of gas in cutting emissions, it said. The proposal will also address nuclear energy, another issue that divides EU states.
The Commission last month suggested labelling some gas plants as green, after its original proposal - which had denied gas plants a green label - faced pushback from central and eastern European states.
But the latest proposal appears to have satisfied neither side, nor the EU's own advisers, who this week urged Brussels to resist political pressure to weaken the rules, saying the credibility of them is at stake.
The Commission declined to comment specifically on the draft document.
"Our work is based on robust, science-based, technical criteria," a Commission representative said, adding that the rules must support sustainable growth and prevent greenwashing.
The taxonomy aims to make truly sustainable activities more visible to investors, and shift capital into helping the EU hit its climate goals. However, it will not block funding for activities that do not receive a "green" label.
Gas produces far less CO2 emissions than coal when burned in power plants. But gas infrastructure is associated with emissions of methane, a potent greenhouse gas.
(Reporting by Kate Abnett and Simon Jessop in London; Editing by Matthew Lewis)