Energy companies considering investing in carbon capture and storage (CCS) systems were given a boost today when the European Commission confirmed that captured emissions would not be included in the emissions trading scheme (ETS).
The commission said that instead the ETS would provide the main incentive for deployment of carbon capture technologies by imposing extra carbon costs on power plants that do not have the technology fitted.
Released today as part of the Commission's wide-ranging climate change action plan, the new proposals ensure reserve legislators the right to exclude all captured emissions from phase II of the ETS which runs to 2012. For phase III, which runs from 2013 onwards, the Emissions Trading Directive will be amended to ensure all capture, transport and storage installations are granted exemption from the ETS.
The move will significantly strengthen the financial case for CCS technology, which the EU accepts currently costs up to 70 per cent more to build and 75 per cent more to run compared to conventional coal fired power stations.
UK Business Secretary John Hutton welcomed the proposals which included plans to streamline planning regulations governing new CCS projects. "Demonstration of this globally significant technology must happen as soon as possible and I hope that the UK's demonstrator plant, expected to be up and running by 2014, can fully participate in EU initiatives on CCS demonstration," he added.
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