Landmark EU decision to finance CCS

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It also icludes innovative renewable energy that will be supported with 300 million EU emission allowances (EUAs), today equivalent to about €4bn but set to be worth more in the future.

“This is a landmark decision for CCS,” says Frederic Hauge, president of The Bellona Foundation and vice-chair of the EU Zero-Emission Fossil Fuel Power Plant technology platform (ZEP).
“It is the world’s largest public support scheme for CCS and will ensure that a key climate solution is tested at large scale in the EU by 2015.” 

CCS is one of several key energy technologies identified in the EU Strategic Energy Technology Plan as having a significant need for additional funding.

Worked hard

The decision comes more than a year after the EU decided to set aside, as part of the EU climate and energy package, the 300 million EUAs in order to get CCS off the ground. Bellona and other organisations had successfully lobbied for the addition of such a provision in the revised Emission Trading Scheme (ETS) directive.

The detailed procedures and criteria, however, had to be established by the Commission in concert with the Member States through a so-called comitology procedure. Bellona fought hard to make sure the scheme also makes CCS projects co-firing with biomass eligible for support. That was achieved, so the EU should now be able to fund the first large-scale carbon negative power production – making electricity whilst sucking CO2 from the air and storing it back underground.

The 300 million EUAs will fund up to 50% of the net costs of CCS and selected renewable energy technologies. The rest will have to be found by project sponsors or Member States themselves. The Commission was therefore keen to have broad support from Member States for the Decision

Took time to agree

“Gathering such support took longer than expected, and it is with great relief that we congratulate the Commission and the Member States with yesterday’s vote,” says Hauge. The European Parliament now has three months to scrutinise the draft Decision in case it goes beyond the mandate given to the Commission by the ETS directive, but it is not expected that this will impact on the Decision.

The 300 million allowances will be distributed through competitive procedures – 200 million by the end of 2011 and the remaining by the end of 2013.