European Union

Brief description:

Energy and climate policy

The development of CCS is part of European Union's energy and climate policy. The European Energy and Climate Package, which was first presented in January 2007 and passed by the European parliament and council in December 2008, focuses on three major policy areas: greenhouse gas emissions, renewable energy and energy efficiency. The package contains targets for renewable energies (20% by 2020), energy efficiency (20% increase by 2020) and the reduction of GHGs (20% by 2020). The EU has also adopted the required emission reduction of 80-95% by 2050 as stated by the IPCC to avoid dangerous climate change.

In March 2011, the European Commission adopted a Roadmap for moving to a competitive low carbon economy in 2050 which commits Member States to a 25% reduction in emissions by 2020, a 40% reduction by 2030, 60% by 2040, and at least 80% by 2050 against 1990 levels. The report states that CCS would need to be deployed on a broad scale after 2035, requiring an annual investment of more than €10 billion.

In the EU the CO2 emissions avoided through CCS in 2030 could account for some 15% of the reductions required. The EC’s Energy Infrastructure Priorities for 2020 and Beyond – A Blueprint for an Integrated European Energy Network calls for pilot plants to come on line in 2015 with commercial start-up in electricity generation and industrial applications by 2020-2025.

CCS

CCS is perceived on the one side as a new technology development which enable the EU to meet its climate change objectives, but also as a major contributor towards the EU's innovation, jobs and growth agenda. CCS entered the European Commission’s portfolio of climate mitigation options as part of the Energy and Climate Package, in January 2007. In April 2009, the European Parliament adopted the CCS Directive, which enables CCS technologies in the EU. A legal framework to manage possible environmental risks and liability issues and economic incentives for CCS as well as a network of demonstration plants are at the heart of the CCS framework directive.

The CCS-directive

Provisions under the CCS Directive include the creation of a permit based CCS storage regime and amendment of existing EU legislation which prohibits or inhibits CCS. It also covers long-term liability for CO2 leakage from storage sites and imposes a requirement that all new combustion plants over 300MW in scale are built carbon capture ready. Member States were obliged to bring into force the laws, regulations and administrative provisions necessary to comply with the EU Directive on CCS by 25 June 2011. Further details regarding the directive can be found within separate Member State country profiles.

ETS and EPS

The Directorate-General for Climate Action (DG CLIMA) makes sure that innovative technologies are deployed safely and that their risks are properly managed. Furthermore, they provide support for the uptake of new technology. First and foremost, the Emissions Trading System is a principal driver of the deployment of new technology, by putting a price on carbon emissions, and so stimulating the development of technologies which avoid them.
In October 2008, the EP’s Environmental Committee voted in favor of an Emissions Performance Standard legislation which limits emissions for all new coal plants built in the EU after 2015. The limit of annual CO2 emissions to a maximum of 500 g/KWh essentially rules out traditional coal plant technologies and mandates the use of CCS.

NER 300

The Committee also adopted an amendment to support the financing of 12 large-scale commercial CCS demonstration projects. This funding mechanism, called NER300, contains the provision to set aside 300 million carbon allowances from the ETS new entry reserve to co-finance the construction of CCS demonstration plants and subsidise installations of innovative renewable energy technology. The value of this support depends on the price of allowances and could be as much as 4.5 bn EUR if each allowance is sold for 15 EUR. Power plants with an output of more than 300 Megawatts are required to assess whether storage sites and transport facilities are available and if it is technically and economically feasible to retrofit the power station for carbon capture.

The European Economy Recovery Plan

Furthermore, the European Commission have approved 15 energy projects which will significantly contribute to the economic recovery of the EU. This supporting mechanism is called the European Economy Recovery Plan and grants €1 billion to six CO2 capture and storage projects and €565 million to nine offshore wind energy projects.

CCS Demonstration Network

To facilitate knowledge sharing the European Commission has set up the European CCS Demonstration Project Network, which aims to foster links amongst large-scale demonstration projects and contribute to raising public awareness and understanding of CCS.