EU advances carbon capture plans

Brussels - The European Commission has drawn up new plans to finance the demonstration of carbon capture and geological storage (CCS) in cooperation with China. The move is in-line with a previous committment to develop and demonstrate near-zero emissions coal-fired power in China, by 2020.

“We have taken action to put in place the regulatory framework and the incentives to facilitate CCS demonstration in Europe and now we are making good on our promise to China," said EC environment commissioner Stavros Dimas. "This important cooperation between the EU and China on CCS can act as a model for cooperation under the post-2012 global climate change regime the world must agree in Copenhagen in December.”

The Commission’s plans include establishing an investment scheme to co-finance the design and construction of a power plant to demonstrate CCS technology in China. The Commission has programmed funding of up to Euro50 million for the construction and operation phase of the project - from a total of Euro60 million earmarked for cooperation with emerging economies on CCS and cleaner coal technologies.

Depending on the choice of technology used, and assuming China introduces some form of carbon pricing instrument, the extra cost of constructing and operating over 25 years a new power plant equipped with CCS in China is estimated at Euro300-Euro550 million.

The Commission said it will work closely with China, Member States, other European Economic Area (EEA) countries and industry to secure the additional financing required. It also proposes to combine these funding sources in a public-private partnership as part of the investment scheme.

European Commission analysis indicates that under an emissions scenario compatible with meeting the 2ºC target, around 18% of global fossil fuel power generation would have to be fitted with CCS technology in 2030. EU leaders have committed to establishing a network of up to 12 CCS demonstration plants in the EU by 2015. 

A new EU directive on the geological storage of carbon dioxide, agreed as part of the EU climate and energy package, sets out an enabling legal framework for CCS to enable the safe operation of CCS in Europe. The EU has also agreed to incentivise CCS demonstration through the EU Emissions Trading System, by providing funding from the auctioning of EU ETS allowances.

The European Economic Recovery Plan has allocated €1050 million to CCS demonstration projects inside the EU. Several EU companies have announced demonstration plants to be completed in the EU over the next 5-10 years.