European Commission signals support for CCS carbon credits plan

European energy commissioner Andris Piebalgs has signalled that the Commission will support proposals to help fund a raft of carbon capture and storage (CCS) demonstration projects using carbon allowances issued as part of the European emissions trading scheme (ETS).

In a speech at the Zero Emission Platform General Assembly in Brussels yesterday, Piebalgs said the Commission would "be sending a positive signal regarding the so-called Doyle-Davies amendment" to proposed CCS legislation, which would allow EU plans for 12 demonstration projects to be funded with the aid of 500 million ETS Emissions allowances.

He added that the allocation of the allowances – which based on projected prices for carbon credits post-2013 could be worth up to €20bn (£16bn) – must be structured to ensure that project operators do not receive windfall profits as a result, that the wider ETS is not distorted, and that a wide range of different CCS demonstrations are supported.

But he also suggested that, were these criteria to be met, the Commission would support the amendment as the best means of funding the projects.

In addition, Piebalgs again reiterated his support for CCS technologies, arguing that the need to maintain energy security for the bloc, particularly in the wake of the conflict in Georgia earlier this year and the knock-on impact on gas supplies, meant that coal would have to remain part of the EU's energy mix for decades to come.

"Europe, the World and China will continue consuming coal and producing electricity from coal," he said, adding that as such, greenhouse gas emission targets could only be met through the roll out of CCS technologies.

Jeff Chapman, chief executive of the UK Carbon Capture and Storage Association, welcomed Piebalgs support for funding demonstration projects through the allocation of carbon credits to developers.

"Allowances would be a significant source of funding and should be sufficient to stimulate the development of the 10 to 12 projects the EU wants," he said. " This is a powerful signal to the member states that this amendment is the way to go."