In a new Bellona paper, “Paying for a Decent Burial: Funding options for an EU programme for full-scale demonstration of CO2 capture and storage,” Hoff analyses benefits and inconveniences of different funding options for CCS demonstration projects.
In the fight against global warming, the European Union has set the goal to decrease the amount of carbon gas emissions from 20 percent by 2020. To achieve this ambitious but necessary goal, EU leaders have called for the building of 10-12 full-scale demonstration projects of CCS by 2015.
Power plants that store their emitted CO2 instead of releasing it into the atmosphere will save themselves the cost of CO2 emissions. However, considering the price of CO2 emissions estimated for the next few years in the EU emission trading scheme – about €35 per tonne – an additional €13 billion is needed to fill the funding gap spread over a 20 year time period.
The European Commission has first turned to Member States to provide the money. “But as the first CCS demonstration plants will be the most complicated and expensive to set, no country wants to make the first step,” says Hoff.
CCS technology is an indispensable tool to reach the target set by the EU, but the lack of funds dangerously delays progress. The Bellona Foundation therefore asks for a substantive share of EU-level funding.
“Different types of solutions exist, but the allocation of any subsidies should be based on competitive tendering and verified storage of CO2,” says Hoff. “The most promising option is the set-aside of EUAs in the 2013-2020 period, as supported by the European Parliament’s environment committee on October 7th”.
The Bellona paper makes the additional point that the only way to convince companies to fund CCS on large scale is to establish a roadmap in order to ban coal- and gas-fired power plants which are not equipped with CCS.
“It is urgent to give CCS a chance, as every delay will make the fight against CO2 emissions even harder,” Hoff says.
The new report can be downloaded in PFF format in the box to the right.