Agreement on funding for clean energy projects

Only Poland voted against a proposal from the European Commission on the rules for funding pilot projects.

The European Union’s national governments have agreed rules on sharing out billions of euros for clean energy projects.

When the matter was put to a vote on Tuesday (2 February) after months of negotiation, only Poland voted against a proposal from the European Commission on the rules for funding pilot projects for carbon capture and storage (CCS) and “innovative renewable” energy projects.

ETS allowances

At stake was how national governments would divide up 300 million allowances from Europe’s emissions trading scheme (ETS) that were earmarked for these technologies by national leaders in December 2008. The value of the fund depends on carbon prices, but analysts estimate that its current value is €4 billion and is likely to rise in future.

National governments and the European Commission have spent more than a year wrangling over who would have the final say over the fund. Government diplomats agreed that the Commission would take the final decision over which projects were eligible for the fund and that the European Investment Bank (EIB) would distribute the allowances.

They also decided that each member state will get at least one demonstration project and no more than three. In principle, the ETS fund will cover half the cost of a project, with the rest to come from national governments or private companies.

Chris Davies, a UK Liberal MEP, welcomed the result: “This is the biggest CCS project in the world announced so far and it has now been given practical shape.” But he added that “it shouldn’t have taken 13 months” to draw up the rules. The EU had a “fighting chance” of meeting its own deadline of having 10-12 power plants equipped with CCS technology by 2015, he said.

‘Landmark decision’

Frederic Hauge, vice-chair of the Zero Emissions Platform (ZEP), a group of companies and researchers that promote CCS, welcomed the vote as a “landmark decision” for CCS.

The Commission expects that the rules will be officially written into the EU’s rule book in May, a delay that gives the European Parliament and the Council of Ministers three months to raise any objections. But people following the negotiations do not expect any upsets.