Europe mulls new rules to drive carbon capture adoption

European Commission set to include carbon capture in the ETS, providing power stations with incentive to install the technology

The European Commission is to consider modifying Europe's emissions trading scheme to ensure carbon dioxide that is captured and stored will not be counted as having been emitted, according to Reuters' reports.

The news agency claims to have seen a copy of a draft document proposing that carbon capture and storage (CCS) technologies be integrated into the ETS as a means of promoting the widespread adoption of the technology.

"CO2 captured and stored will be credited as not emitted under the emissions trading scheme," the draft document said.

In theory, this would mean that firms that install the technology would be unlikely to use up their full emissions allowance, assigned under the ETS, and would therefore be able to sell their excess allowances.

CCS technologies capable of capturing carbon dioxide emitted from power stations and storing it in geological formations currently remain at the trial phase. However, the EU has signalled it would like to have several pilot plants operational by 2015, while the UK this month kicked off a competition to build the country's first CCS facility.

The Commission's plans aim to provide a financial incentive that will drive power stations to install the technology quickly once it is proven without the need for mandatory regulations.

"The Commission addressed the economic, social and environmental implications of mandatory CCS ... and concluded that at this time a mandatory requirement should not be imposed," the document said. "If the carbon market is used, CCS will be deployed if and when it is cost-effective."

The proposals also set out rules designed to ensure carbon is captured and stored safely and none leaks back into the atmosphere. These include a permit system for companies that engage in CCS, rules governing the safe trapping, transport and sequestration of carbon, and an inspection mechanism to ensure projects are delivering the carbon savings promised.

The document is expected to form part of a package of new climate change legislation scheduled to be released by the Commission early next year.