May 29, 2008
In addition to calling on member states to provide the necessary support, EU Energy Commissioner Andris Piebalgs is also looking for commitment “on a big scale” from industry itself. Business must see CCS as an opportunity, he said.
Jan Panek, head of unit for Coal and Oil in the Commission‘s Energy and Transport Directorate (DG TREN), pointed to the possibility of “quick money” through a combination of public and private funding sources, whereby member states could use EU ETS auctioning revenues to help with their share of the bill. A double credit scheme under EU ETS is favoured by UK Liberal Democrat MEP Chris Davies, who wants to restrict the time-frame of the scheme and limit the volume of CO2 that could be credited to 2.5% of the EU’s total emissions.
But Italian Green MEP Monica Frassoni argued that the EU “cannot afford” CCS, claiming that the double credit plan would “kill” the EU’s carbon market. Furthermore, CCS funding will divert public funds from renewables, she said.
Mark C. Lewis, the managing director of Global Company Research at Deutsche Bank, believes markets should decide and that ultimately “consumers have to pay”. Lewis also slammed EU policymakers for undermining the EU ETS by over-allocating free emissions permits in the first trading period (2005-2007).
Brussels should leave the markets alone, he said, because they “cannot pretend they know the market”.His comments caused a spirited reaction from Davies, who described the notion that policymakers should not intervene in carbon markets as “tosh”.Energy firms like Shell and E.ON are looking for a greater commitment of funds from public authorities in order to “kick start” CCS.
Henry Edwardes-Evans, managing editor of Platts Power, an energy markets news service, said the EU’s current CO2 price, which hovers around €25 per tonne, is “not nearly high enough” to drive CCS, citing “underestimation” of CCS costs.Lewis commented that “we would get there” with a CO2 price between 40 and 45 euros per tonne.
Jeff Chapman, the chief executive of the UK Carbon Capture and Storage Association (CCSA), pointed to a “missing incentive for member states to incentivise”. A select group of member states should pay for CCS but could “share the burden” by being allowed to count CCS funding towards their renewable energy targets, he suggested.
Gavin Edwards, head of Climate and Energy at Greenpeace International, voiced firm opposition to CCS, advocating that existing, available technologies like renewable energies and energy efficiency technologies should be “rewarded” instead. In contrast, the WWF‘s EU ETS coordinator Sanjeev Kumar, whose organisation supports CCS, argued at a 27 May Commission workshop that public funds should be used to support the technology since it is a “public good”.
From EurActivAuthor : EMI