The European Parliament adopted by 474 votes to 66 with 20 abstentions, a resolution on supporting early demonstration of sustainable power generation from fossil fuels, in response to the Commission’s communication on the same issue.

The own-initiative report had been tabled for consideration by Christian EHLER (EPP-ED, DE) on behalf of the Committee on Industry, Research and Energy.

CCS technologies : Parliament recognises that the use of CCS technologies can contribute to attaining the EU’s stated climate targets after 2020. Given the role played by fossil fuels in the energy mix of many countries worldwide, MEPs believe that these technologies in the EU could, in addition to the efforts being made to increase energy efficiency and the use of renewable energies, contribute to achieving security of supply and climate protection.

Insufficient Commission measures : Parliament defends the idea that the construction of at least 12 demonstration facilities within the EU is necessary in order to achieve the desired use of CCS technologies in power stations and to secure CO2 storage from 2020. MEPs take the view that the measures unveiled by the Commission are not sufficient to provide the desired incentives for constructing at least 12 demonstration facilities by 2015. They points out that investment decisions and capital acquisition on financial markets for demonstration facilities are made more difficult by the absence of a legislative framework, in particular at national and regional level, and by uncertainties about future movements in emission trading allowance prices.

Short-term financing by the 7th Framework Research Programme : MEPs take the view that the time delay between the potential support from emissions trading from 2013, and the necessary planning and construction phase of demonstration facilities, can be overcome by making financial resources available. They propose in this connection that the risk sharing finance facility resources held back after the adoption of the Seventh Framework Research Programme until the mid-term review, should be committed for CCS demonstration facilities so as to make resources available promptly to support these projects and, if possible, to supplement them with other funds in cooperation with the European Investment Bank, as envisaged by the Commission. Parliament calls on the Commission to produce a detailed assessment of the cost of, and the share of private and public funding in, each of the 12 demonstration facilities.

Support via the EU emissions trading scheme (EU ETS) : MEPs consider that incentives for CCS technology production should be increased, by allocating, within the EU ETS, allowances for anticipated CCS technology production with an increase of at least 25 % from 2013. However, they consider that such allowances should be allocated at least two years prior to construction so that they can be traded and consider alternatively, that an allocation of 500 million emission trading allowances for the support of the projects within the EU should be envisaged. They encourage the Member States to use proceeds from auctioning emission allowances in the framework of the EU ETS to support CCS technologies and the necessary infrastructure.

Infrastructure and transport : MEPs regard as necessary an additional EU commitment on facilitating development of the necessary transport infrastructure, and notes in this regard that the authorisation procedures in individual Member States for other transport infrastructures can last for years; in this connection points to the importance of shortening such procedures to ensure construction by 2020.

Selection criteria for projects : Parliament stresses that binding and strict criteria should be set for the long-term safety and permanence of storage sites. MEPs considers it imperative that at least the 12 demonstration facilities earmarked for assistance should cover all possible combinations of the three CCS technologies with the various energy sources and storage options and for these facilities to be sited with a view to maximum geographical spread across the European Union. The report recommends that power station projects with a proposed minimum output of 180 MW be included in the selection.

The Committee on Industry, Research and Energy adopted an own-initiative report drafted by Christian EHLER (EPP-ED, DE) on supporting early demonstration of sustainable power generation from fossil fuels, in response to the Commission’s communication on the same issue.

MEPs recall that the 2005 Special Report on carbon dioxide capture and storage technologies (CCS) by the Intergovernmental Panel on Climate Change (IPCC) which identified CCS as a promising technology for the rapid reduction of global greenhouse gas emissions, with the potential to achieve a reduction of up to 55% by 2100.

The report recognises that the use of CCS technologies can contribute to attaining the EU`s stated climate targets after 2020. Given the role played by fossil fuels in the energy mix of many countries worldwide, MEPs believe that these technologies in the EU could, in addition to the efforts being made to increase energy efficiency and the use of renewable energies, contribute to achieving security of supply and climate protection.

The Industry Committee endorses the view that the construction of at least 12 demonstration facilities within the EU is necessary in order to achieve the desired use of CCS technologies in power stations and to secure CO2 storage from 2020. It takes the view that the measures unveiled by the Commission are not sufficient to provide the desired incentives for constructing at least 12 demonstration facilities by 2015 . MEPs point out that investment decisions and capital acquisition on financial markets for demonstration facilities are made more difficult by the absence of a legislative framework, in particular at national and regional level.

MEPs take the view that the time delay between the potential support from emissions trading from 2013, and the necessary planning and construction phase of demonstration facilities, can be overcome by making financial resources available. They propose in this connection that the risk sharing finance facility resources held back after the adoption of the Seventh Framework Research Programme until the mid-term review, should be committed for CCS demonstration facilities so as to make resources available promptly to support these projects and, if possible, to supplement them with other funds in cooperation with the European Investment Bank, as envisaged by the Commission.

As regards the EU emission trading scheme (EU ETS) , MEPs consider that incentives for CCS technology production should be increased, by allocating, within the EU ETS, allowances for anticipated CCS technology production with an increase of at least 25 % from 2013. However, they t consider that such allowances should be allocated at least two years prior to construction so that they can be traded and consider alternatively, that an allocation of 500 million emission trading allowances for the support of the projects within the EU should be envisaged. They encourage the Member States to use proceeds from auctioning emission allowances in the framework of the EU ETS to support CCS technologies and the necessary infrastructure.

MEPs regard as necessary an additional EU commitment on facilitating development of the necessary transport infrastructure . They note, in this regard, the authorisation procedures in individual Member States for other transport infrastructures which can last for years, and in this connection points to the importance of shortening such procedures to ensure construction by 2020.

Lastly, MEPs considers it imperative that at least the 12 demonstration facilities earmarked for assistance should cover all possible combinations of the three CCS technologies with the various energy sources and storage options and for these facilities to be sited with a view to maximum geographical spread across the European Union. The report recommends that power station projects with a proposed minimum output of 180 MW,be included in the selection.

PURPOSE: to support early demonstration of sustainable power generation from fossil fuels.

CONTENT: the EU has set itself ambitious targets to reduce green house gas emissions. Emissions from the energy sector – primarily coal and gas, lead to approximately 40% of all CO2 emissions in the EU. Thus, any strategy to address climate change needs to consider ways in which to reduce the effect of CO2 emissions from fossil fuel power generation. One way forward is the capture and storage of CO2 (CCS). This technology, which is expected to be commercially feasible in 10-15 years, will enable CCS to stand on its own feet in an Emission Trading Scheme.

This Communication complements a Commission proposal for a Directive on Geological Storage of CO2. Its purpose is to set out a strategy for the realisation of CCS and to set out a vision on how to effectively coordinate and support large-scale CCS demonstrations as well as creating the conditions for bold industrial investments in a series of plants.

The investment needed to bring CCS to market is substantial. Around EUR 1 billion will have to be spent between now and 2020 on R&D activities to bring CCS technologies to a state in which they can be commercially deployed. In addition, early demonstrations of CCS in industrial-scale power plants will require further spending to the tune of billions of Euros. For example, several hundred million Euros per plant will have to be invested in large-scale projects that include capture, transportation and storage. This is significantly more than for standards plants.

The first step to enabling CCS power generation can be taken without substantial additional costs. The Commission’s proposal for a CCS Directive will crate a comprehensive regulatory framework to ensure the safety of CCS deployment. In response to these developments the EU is putting a structure in place that seeks to stimulate the demonstration of CCS in power plants. This is the SET-Plan, which creates a framework in which CCS can develop. The plan identifies CCS as one of the strategic energy technologies and sets the time horizon of 2020 for making its use in power generation a realistic option. A coherent and coordinated EU-level action could add value and enhance overall impact, whilst respecting the autonomy of national initiatives.

The SET-Plan proposes to examine avenues for raising additional funds. The European Investment Bank (EIB) is currently analysing new products for financing CCS in addition to the existing Risk Sharing Finance Facility (RSFF)

Within this context the Commission is proposing to launch a European Industrial Initiative on CO2 capture, transport and storage starting in 2008. While stimulating large-scale demonstration, this Initiative will also seek to address, in an integrated manner, the need for continuous research and for increased public awareness and acceptance.

In order to push this initiative forward, in 2008 the Commission will set up a Support Action under the 7 th Framework Programme the purpose of which will be to create and animate a network of CCS demonstration projects. In this way the Commission will provide first movers with a list of best practices. Information thus gathered will help focus policies establishing a long-term value chain for CO2 and will give coherent and effective interaction of participating projects with related R&D undertaken across the EU.

PURPOSE: to support early demonstration of sustainable power generation from fossil fuels.

CONTENT: the EU has set itself ambitious targets to reduce green house gas emissions. Emissions from the energy sector – primarily coal and gas, lead to approximately 40% of all CO2 emissions in the EU. Thus, any strategy to address climate change needs to consider ways in which to reduce the effect of CO2 emissions from fossil fuel power generation. One way forward is the capture and storage of CO2 (CCS). This technology, which is expected to be commercially feasible in 10-15 years, will enable CCS to stand on its own feet in an Emission Trading Scheme.

This Communication complements a Commission proposal for a Directive on Geological Storage of CO2. Its purpose is to set out a strategy for the realisation of CCS and to set out a vision on how to effectively coordinate and support large-scale CCS demonstrations as well as creating the conditions for bold industrial investments in a series of plants.

The investment needed to bring CCS to market is substantial. Around EUR 1 billion will have to be spent between now and 2020 on R&D activities to bring CCS technologies to a state in which they can be commercially deployed. In addition, early demonstrations of CCS in industrial-scale power plants will require further spending to the tune of billions of Euros. For example, several hundred million Euros per plant will have to be invested in large-scale projects that include capture, transportation and storage. This is significantly more than for standards plants.

The first step to enabling CCS power generation can be taken without substantial additional costs. The Commission’s proposal for a CCS Directive will crate a comprehensive regulatory framework to ensure the safety of CCS deployment. In response to these developments the EU is putting a structure in place that seeks to stimulate the demonstration of CCS in power plants. This is the SET-Plan, which creates a framework in which CCS can develop. The plan identifies CCS as one of the strategic energy technologies and sets the time horizon of 2020 for making its use in power generation a realistic option. A coherent and coordinated EU-level action could add value and enhance overall impact, whilst respecting the autonomy of national initiatives.

The SET-Plan proposes to examine avenues for raising additional funds. The European Investment Bank (EIB) is currently analysing new products for financing CCS in addition to the existing Risk Sharing Finance Facility (RSFF)

Within this context the Commission is proposing to launch a European Industrial Initiative on CO2 capture, transport and storage starting in 2008. While stimulating large-scale demonstration, this Initiative will also seek to address, in an integrated manner, the need for continuous research and for increased public awareness and acceptance.

In order to push this initiative forward, in 2008 the Commission will set up a Support Action under the 7 th Framework Programme the purpose of which will be to create and animate a network of CCS demonstration projects. In this way the Commission will provide first movers with a list of best practices. Information thus gathered will help focus policies establishing a long-term value chain for CO2 and will give coherent and effective interaction of participating projects with related R&D undertaken across the EU.