CCS demo plants ‚may not be ready by 2015’

Europe’s goal of having up to 12 carbon capture and storage (CCS) demonstration plants up and running by 2015 is at risk because European funds will come in too late, industry stakeholders warned at a conference in Brussels on Wednesday.

Some €4.5bn from the sale of 300 million carbon allowances under the EU’s emission trading scheme will not reach CCS and renewable energy project developers until the end of 2012, a European Commission official acknowledged.

About 200 million allowances are set to be sold in 2011-12 and a further 100 million in 2013. EU states must submit projects for the first funding period by May, but the European Investment Bank (EIB) will not make a decision until the end of 2012.

This will not leave enough time to meet the 2015 deadline, said Graeme Sweeney, chairman of the industry-led Zero Emissions Platform (ZEP). Developers are unlikely to make final investment decisions until they know if they would get the funds, he said. CCS developers will get about two-thirds of the total funds available.

Commission and EIB officials told stakeholders that they would try to speed up the process. „If we can contribute to any reduction of the timeline we will, but we are not being remunerated to take risks,” said Christopher Knowles of the EIB.

A delay might have a knock-on effect on CCS deployment. A study has already warned that the date for full-scale commercialisation is now likely to be as late as 2025-2030. The commission says CCS could be deployed in 2020-25.

Many delegates on Wednesday called for more emphasis on CCS for gas and in the manufacturing sector, rather than only for coal and in the power sector in future. Six projects have already received €1bn from economic recovery funds.

Revenues from carbon auctioning can pay for up to half of CCS costs. Member states and the private sector will make up the rest. Only two member states, the UK and the Netherlands, have announced their contributions so far (£1bn and €160m).

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