Brussels, 29/06/2009 (Agence Europe) - On Thursday 25 June, the European Commission presented to the Environment Council its plan for the joint financing of a demonstration project for carbon capture and geological storage (CCS) in cooperation with China. The Commission plans to make €50 million available for the construction and operation phase of electricity generation, to be taken from the €60 million already allocated to cooperation with emergent countries in the field of “clean coal technology” and CCS. The EU member states and the European Economic Area (EEA) are also invited to make a contribution, as is China. The communication on this subject, adopted on 25 June by the Commission, gives substance to a commitment taken by China and the EU in 2005 and comes within the framework of international climate talks aimed at concluding a global post-2012 agreement.
Environment Commissioner Stavros Dimas commented that this was a positive sign to the EU's partners, a call to help developing countries, and that there will be a transfer of technologies. In his view, this investment plan may serve as a model for other technological cooperation activities between developed countries and developing countries with an emerging economy.
The Commission recommends public/private partnership and suggests different financing solutions, including: - public financing and the use of mechanisms opening the right to carbon credits or other instruments such as the clean development mechanism (CDM) of the Kyoto Protocol; - the introduction of national or global systems for emissions trading in industrial sectors where the capacity exists to monitor emissions and ensure compliance with emissions ceilings, such as high energy intensive sectors (electricity generation, aluminium, steel, cement, refineries, pulp and paper), which for the most part are exposed to strong international competition.
Contributions other than government contributions may take the form of concessional loans from multilateral financing institutions or public banks such as the EIB, and from private investment.
Coal is the main source of energy in China (70% of its energy mix) and will continue to remain so for many more years to come. During the year 2007 alone, this emerging country built a 500MW coal-fired electricity generation plant every two and a half days, which represents a rise in emissions from this kind of power plant of some 4 megatons of CO2 per week. Hence the interest for CCS techniques for reducing the impact of coal combustion on climate, the Commission underlines, pointing out that the heads of state and government pledged last December to establish up to 12 CCS demonstration plants in the EU by 2015.
China is resolutely committed to so-called “clean coal technologies” with a view to reducing greenhouse gas emissions. The national programme for combating climate change adopted in June 2007 explicitly mentions the development and diffusion of advanced and adequate technologies, including CCS. Depending on the technology selected and as long as China uses a form of carbon pricing, the additional cost estimated in capital and operational costs for the very first CCS demonstration plant in China - a 400 MW electricity plant with Integrated Gasification Combined Cycle (IGCC) over a lifetime of 25 years - is about €730 million (€125 million in capital and €265 million in operational costs for transport and storage) if IGCC technologies are used, and about €980 million for a pulverised coal plant. (A.N./transl.jl)