Compromise EC deal rescues CCS funding package
EU countries have put aside their differences to agree the world’s biggest subsidy package for carbon capture and storage (CCS) in a compromise deal with the European Commission.
At the end of a marathon seven-hour meeting with the European Commission (EC) in Brussels, member states voted overwhelmingly to support a package that could raise €6bn–£9bn ($9.5bn–$14.3bn) for the technology, giving Europe an edge in the global race to develop CCS.
The meeting was viewed as a last-chance effort to rescue a plan to allocate 300 million allowances from the European Emissions Trading Scheme to fund 10–12 CCS demonstration projects.
In a key concession, the EC dropped a requirement that EU states foot half the cost of each €2bn project through public coffers. UK Member of the European Parliament Chris Davies says that only Poland voted against the move, while Spain, which currently holds the rotating EU presidency, abstained from voting.
The scheme was agreed last in December 2008, in the EU’s climate and energy package. But after details were published last summer, the EC and member states clashed over how to disburse the allowances. Three proposals were shot down over the EC’s insistence that Brussels choose the projects and decide how and when the allowances are converted into cash.
Developers of six CCS projects, which last year received €180m through the EU recovery package, signed an open letter to European environment ministers last week urging them to back the EC. The developers, including Vattenfall, Enel and Endesa, said they could not progress projects without certainty of eligibility for funding.
Jesse Scott of environmental think tank E3G, who worked behind the scenes for a year to help reach consensus, says UK Energy and Climate Change Secretary Ed Miliband was instrumental in achieving the ‘yes’ vote. “The UK swung it. Once they decided to back it, Germany couldn’t block it on its own,” she says.
But one concession to Germany could still knock the EU off course in meeting its 2015 deadline for CCS demonstration projects: a 12-month period to obtain required permits for storage in saline aquifers has been extended to 36 months.
Scott says the timetable has the “potential to slip quite a bit, but that’s the compromise”.
Published: Thursday, February 4 2010
