NER 300 scrutinized in European Parliament hearing

The panel and audience at the NER 300 public hearing in the European Parliament industry committee on 27 November 2013.

Publish date: November 28, 2013

As CO2 Capture and Storage (CCS) climbs back up the agenda in the EU, the European Parliament’s Industry, Research and Energy Committee (ITRE) held a public hearing on 27 November 2013 addressing the NER 300 funding mechanism for CCS and renewables. The hearing saw the European Commission concede that the inflexibility of the scheme had halted promising European CCS projects.

The hearing, entitled ‘using NER 300 and the Energy Recovery Plan to renew the energy sector’ gathered over 20 Members of the European Parliament (MEPs) who engaged in debate with the Commission and visiting representatives of projects with NER 300 experience.

DG Clima Director Humberto Delgado Rosa opened the session by underscoring the success of NER 300 as a funding mechanism for innovative technologies. He was however, quick to add that this may not be the case when viewed from the perspective of CCS – which is after all the perspective from which the NER 300 was created.

Apart from citing usual culprits for lack of CCS deployment in Europe – business case, funding gaps, role of Member States – Delgado Rosa was prompted by MEP Chris Davies to admit the role NER 300 played in hindering viable European CCS projects. The Commission acknowledged that the case in point, Air Liquide’s Green Hydrogen project, had indeed been a victim of the NER 300 scheme’s inflexibility.  

Jacques Kiewiet from Air Liquide’s Green Hydrogen project, a hydrogen production facility which was built ready for CCS, presented their experience with the NER 300. Air Liquide applied for NER 300 funding but failed to be rewarded any. Kiewiet explained that what went wrong was a calculation of Air Liquide which did not exactly match the requirements of the NER 300. Due to the confidentiality of the application procedure, Air Liquide and the European Commission did not communicate on this error. Therefore, rather than clarifying what was wrong and correcting it, Air Liquide was deemed  unsuccessful in its application and one of Europe’s most promising CCS projects came to a halt.

Following this presentation MEP Chris Davies repeated his earlier point to the Commission, that a CCS project had been lost through a protracted process with a lack of basic communication. 

Humberto Roda answered that the involvement of the European Investment Bank (EIB) in the handling of the NER 300, as well as a lack of maneuvering space as a consequence of handling Member States’ money, had not helped the matter. He also conceded, however, that “if” the Commission should learn something from this experience – and one certainly hopes it will – it is that timing should be improved for the next time.

The Commission has indicated that a new mechanism or a reworked NER 300 will be presented. CCS has recently been somewhat rejuvenated as part of the discussion surrounding a low-carbon Europe and will be included in when the Commission presents the 2030 Framework for Climate and Energy early next year. This was reiterated during another CCS hearing in the European Parliament on 26 November, which also saw the participation of several MEPs, including Chris Davies.

Chris Davies has long been involved in CCS has authored a CCS report which passed in a European Parliament environment committee vote on 27 November (read more here). Davies took the occasion of the NER 300 hearing to reflect on where CCS funding originated and where it is going. In 2007 EU Member States committed to having 12 CCS projects ready by 2015, but failed to put in place any mechanisms to guarantee this. The NER 300 was then built as a reserve of 300 million Emission Unit Allowances (EUAs) from the EU’s Emission Trading Scheme (ETS) to fund CCS. Funding of innovative renewable technologies was later included as a compromise and as renewables also enjoy other support, it was understood that the NER 300 emphasis would be on CCS. As it was – and due to a variety of unforeseen circumstances, such as the low carbon price – a CCS project is yet to receive any NER 300 funding.

Other participants in the NER 300 hearing were Åsa Burman, CEO of the Swedish biogas project GoBiGas, and Bernard Delpech of the European Association for Storage of Energy (EASE).

Burman presented on the progress made at GoBiGas with NER 300 funding and the challenges which the project now faces in phase two. Sweden is one of Europe’s largest producers and users of bio-based energy and is part of an important debate on ensuring the sustainability of such energy sources.

Delpech presented the issue of energy storage, which with an increasing amount of ‘intermittent’ renewable energy sources in Europe, is seeing a rapidly increasing need for more flexibility. This is a vital component of enabling innovative technologies to deliver, and Delpech underlined the need for support also in this area.