EU backs California-style "ban" on new coal plants

The European Parliament has put itself on a collision course with several member states, including the UK, after the environment committee voted for new legislation that would effectively ban all new coal-fired power stations built without carbon capture and storage (CCS) technologies after 2015.

While all member states are pushing for the rapid roll out of CCS technologies capable of sequestering carbon emissions underground, countries such as the UK and Poland have argued that with the technology still unproven blocking new plants without CCS could lead to increased energy insecurity.

Former UK business secretary, John Hutton, has repeatedly argued that the price of carbon imposed through the EU's emissions trading scheme represented the best means of encouraging energy firms to install CCS systems.

However, yesterday the European Parliament's environment committee voted overwhelmingly in favour of the so-called "Schwarzenegger-clause", named after the policy adopted by the Californian governor, which would impose carbon emission standards on new coal-fired power plants, effectively banning plants built without CCS technology.

Under the proposals, new power plants with a capacity of more than 300MW would from 2015 be allowed to emit a maximum of 500g of carbon dioxide per kilowatt hour on an average annual basis. This would prohibit the building of new coal-fired power stations that typically emit between 700g and 850g of CO2 per kilowatt hour, and new oil-fired stations that emitted 590g per kilowatt hour, while allowing cleaner gas-fired power stations and plants with CCS systems fitted.

The legislation also includes plans to help finance 12 CCS demonstration projects by issuing the projects with 500 million carbon credits under the European emissions trading scheme with a potential value of over €10bn (£7.8bn), and outlines a timeline designed to ensure that the demonstration projects have been agreed before the UN's Copenhagen climate change talks in late 2009.

In addition, the legislation sets outs rules governing CCS facilities that require developers to take responsibility for the site for 50 years and help fund an independent agency for monitoring the effectiveness of carbon storage sites.

A spokeswoman for the environment committee said that negotiations between the parliament and member states will now commence, with a goal of reaching a final agreement on the legislation by the end of the year. The full European Parliament would then be in a position to vote on the package in December.

However, she admitted that the negotiations were likely to be "very tough" and that a compromise deal may be required to secure the support of coal-reliant economies such as Poland.