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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 a 20% increase of renewable energies, 20 % improvement of energy efficiency and a 20 % reduction of GHGs by 2020. This is referred to as the 20-20-20 targets. 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 January 2014 the European Commission presented a framework for 2030, to ensure regulatory certainty for investors and a coordinated approach aiming the member states. The frameworks aims to reduce the domestic GHG emissions by 40% below the 1990 level by 2030. Renewable energy should be increased by at least 27%.

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.

Link to the official CCS directive.

CCS

CCS is perceived on the one side as a new technology development that enables 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.

The CCS Directive aims to ensure that the CCS technology is deployed in an environmentally safe manner within the EU and to fight climate change (cf CCS directive art 1.) This is a comprehensive legal framework to manage possible environmental risks, liability issues and economic incentives for CCS through detailed rules and obligations. A network of demonstration plants is also at the heart of the CCS directive.

As of late 2012, plans to have up to 12 commercial-scale demonstration plants operating in Europe by 2015 were considered unrealistic, according the GCCSI's 2012 status report, with estimates closer to 4–5 projects operating within the next 5–6 years.

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. As of November 2013, 6 Member States were facing infringement cases for failing to transpose the directive, and 10 cases have been closed.

Further details regarding the directive can be found within separate Member State country profiles.

ETS and EPS

EU is committed to reduce its overall emissions by a given percentage according to the Kyoto Protocol (cf. art 3). EU and its member states have decided to fulfil their commitments jointly (usually referred as the "EU bubble"), through differentiated commitments for the respective member states. The EU Emission Trading Scheme (EU ETS) is a tool to meet their commitments.

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 that avoid them. In October 2008, the EP’s Environmental Committee voted in favour of an Emissions Performance Standard legislation that 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. The third phase of the ETS begins on 1 January 2013 and runs until 2020. National emission caps will be replaced by one common cap for the whole EU, which will decrease every year up to 2020 in order to hit the 21% reduction (compared to 2005).

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 subsidize renewable energy technology. The value of this support depends on the price of allowances, which has been lower than anticipated. There were 13 CCS proposals received by the European Investment Bank, which completed due diligence assessments of each.

The European Commission decided in December 2012 to award funding from the €1.2 billion pot to 23 renewable energy projects but no CCS projects. Of the 13 CCS projects submitted by the first round deadline in May 2012, none remained by December as projects withdrew or were rejected for a variety of reasons, from financial to legislative. Read ZERO's overview here. The EC has stressed its commitment to funding CCS and launched a second round of NER300 in 2013. White Rose was awarded NER300 funding in 2014, as the only CCS project.

The deadline for the first round projects has been dealyed, which means that the deadline for the second round and White Rose has also been pushed back two years.

NER400

As part of the deliberations on the EU's Framework for Climate and Energy 2020-2030, European leaders lat night mandated the creation of a successor program to NER300. The new program will raise €9 billion assuming a carbon price of 23 €/ton. The EU wants NER400 to cover "low carbon innovation in industrial sectors" as well as CCS and renewables.

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. Unfortunately only two of the CCS projects have reached a feed study phase, and the rest are either cancelled or dormant.

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.




Projects in European Union:





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