Industry calls for Europe to suspend carbon capture funding process

by ClickGreen staff. Published Thu 15 Nov 2012 14:45
Warning that CCS funding process may be flawed
Warning that CCS funding process may be flawed

The UK's Carbon Capture and Storage Association has led calls for a pause in the funding selection process to ensure pioneering projects will not be left behind and forced to close.

In an open statement supported by the likes of E.on, Alstom, National Grid and Drax, the group points out a number of promising CCS demonstration projects will miss out on NER300 funding because of a gap between support from national Governments.

Last week, ClickGreen revealed the developers of Europe's leading capture capture and storage project were being forced to shut down operations after the UK Government refused to provide vital backing.

The pioneering Don Valley CCS project failed to win Government support despite working towards creating Europe's first industrial-scale carbon capture installation.

In July, the 650MW scheme in South Yorkshire topped the list of European CCS programmes competing for an estimated €337 million share of the €1.3 billion funding pot available in the EU's NER300 allowances.

The UK had four projects on the list but each required co-funding commitments from the UK.

DECC refused to support 2Co Energy, operators of the Don Valley CCS project, and selected four other bidders to be shortlisted for the next phase of its £1bn CCS competition.

Lewis Gillies, CEO of 2Co Energy, said the project could not survive without backing from the Government.

Now 17 industry leaders have called on the European Commission to defer its selection of first tranche CCS projects for a few months to allow more discussions to take place.

The statement reads: “We understand that a number of promising CCS demonstration projects around Europe may miss out on NER300 funding because their relevant national governments have so far been unable to satisfy the EU Commission on the level of national co-funding that they would provide. It has been suggested that there may only be one CCS project selected for funding under the first tranche.

“We fully understand the need for national co-funding and for Member States to make clear commitments in this respect. The NER300 is a partnership between the EU and Member States. As parties involved in, or close to, CCS demonstration projects, we also understand from our own engagement on them with national governments, that these commitments are not made lightly, not least given the significant sums of money involved and the current economic climate. It is also clear to us that funding commitments can only be made on the basis of close dialogue and partnership between the different parties involved. And it is our firm belief that the necessary co-funding commitments can be made if such dialogue is vigorously pursued.

“We therefore urge the Commission to defer its selection of first tranche CCS projects for just a few months to allow this dialogue and negotiation to take place before the launch of the second tranche.

"If the projects had to re-apply for the second tranche of the NER300, that would cause a critical delay. And if it means only one project is supported from the first tranche, it would further delay the meaningful demonstration of CCS in Europe notably in the power sector, (whilst North America and other regions are proceeding with projects). Politically it would expose the EU to the charge that it's simply not walking the talk on CCS.

“A small extension to the process of the type we propose could deliver two more CCS projects to the list and fulfil the original visionary ambition of the NER300 programme.”




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