The European Commission has adopted a proposal to provide financial support for carbon capture and storage (CCS) demonstration projects through the sale of 300 million emission allowances.
The emission allowances will be set aside from the EU emission trading scheme in its next trading period – 2013-2020 – and sold by the European Investment Bank (EIB).
The sale of allowances will also fund the development of innovative renewable energy technologies.
The ‘New Entrant Reserve 300’ fund was agreed in 2008 by EU heads of state and at current carbon prices is worth around €4.5 billion. At a carbon price of €20/tonne, it would be worth €6 billion.
Revenues from the sale of the allowances will be granted to eight proposed CCS demonstration projects, which will be selected by the European Commission based on recommendations made by the EIB.
The EIB has yet to give details of how and when it will sell the emission allowances.
The European Union says it will fund up to half of each demonstration project. The remaining funds will have to be provided by EU member states and the private sector.
Each member state will be allowed to host up to two CCS demonstration projects.
