http://www.euractiv.com/en/climate-change/climate-votes-offer-missing-piece-chinese-coal-puzzle/article-176156?_print

Climate votes offer missing piece in Chinese coal puzzle[fr]
Published: Wednesday 8 October 2008

MEPs have voted in support of a multi-billion euro fund to drive the 
construction of CO2 capture and storage demonstration plants. 
Coal-dependent China is said to be waiting for Europe to move on the 
issue, but EU governments are yet to formally back the financing plan.
Background:

Carbon capture and storage (CCS) is a process involving the separation 
of carbon dioxide from the gases produced by large stationary power 
plants. The CO2 is then compressed, transported and stored in geological 
formations, either on land or in the ocean (see EurActiv LinksDossier).

The Commission backs CCS as an essential part of its CO2 reduction 
efforts and put forward a Communication on a legal framework for storing 
CO2 as part of its climate and energy package of 23 January. In March 
2007, EU member states also pledged to get 10-12 CCS demonstration 
plants up and running by 2015.

But CCS technology is expensive and decreases the average efficiency of 
power plants by up to 20%. Neither member states, the Commission nor the 
private sector have thus far pledged any significant funding to drive 
the development of the demonstration plants.

A number of EU countries, including new member states like Poland, 
remain heavily dependent on coal for power generation.

The Parliament's environment (ENVI) committee yesterday (7 October) 
supported two separate reports that contain landmark amendments related 
to the financing and commercial development of CCS technology (EurActiv 
08/10/08).

MEPs endorsed an amendment, tabled by Irish Christian Democrat MEP Avril 
Doyle, that recommends the free allocation of up to 500 million CO2 
emissions allowances to select CCS demonstration plants. The allowances 
are normally reserved for new entrants to the EU Emissions Trading 
Scheme (EU ETS).

Equivalent to approximately €10 billion at current carbon market prices, 
this allowance-based financing scheme was bolstered further when MEPs 
endorsed a separate amendment that would set a CO2 output limit on power 
generating facilities.

The amendment, tabled by UK Liberal MEP Chris Davies in his report on 
the Commission's proposal for a legal framework on the geological 
storage of CO2 in the EU, is meant to oblige power generators to invest 
in CCS technology to meet the CO2 limit requirements, notably for their 
coal-fired power stations.

Coal-fired dragon

For China, EU efforts to develop commercially viable technologies that 
can neutralise the CO2 output of coal-fired power stations are of great 
interest.

China accounted for 40% of the increase in global primary energy demand 
in 2007, and most of that demand was met with coal, according to BP's 
2008 Statistical Review of world energy, released last week in Brussels.

Most analysts agree that world's most populous country's reliance on 
coal is unlikely to decrease in the foreseeable future. Beijing has few 
alternatives for meeting the challenge of constantly rising domestic 
energy demand that results from continued high levels of annual GDP 
growth, says Fabian Zuleeg, senior policy analyst at the European Policy 
Centre in Brussels.

But the continued burning of coal is having a tremendous impact on the 
climate and on the environment, both within China and globally. 
Decreased run-off from Himalayan glaciers, coupled with higher water 
demand, has led to annual declines in water levels in key rivers like 
the Yangtze, which acts as the lifeblood of millions of Chinese.

Chinese leaders are taking the problem seriously and are "very willing" 
to reduce the CO2 impact of their economy, Doyle told journalists in 
Brussels yesterday. Beijing has also been pressing EU leaders to provide 
clearer answers on when and how the 10-12 CCS demonstration plants will 
be completed, she said.

Crunch time

Whether the Council will endorse the Doyle-Davies amendments on CCS as 
part of an eventual deal on the climate package before the end of the 
year remains to be seen. But EU countries should either back the 
Parliament on the issue or propose a realistic alternative, says Davies, 
who yesterday challenged the Council to "match fine words with some good 
deeds".


Next steps:

* End 2008: The Council, Parliament and Commission to negotiate a deal 
on the climate package;
* March 2009: End of Parliament's legislature and alternative date for 
finalising the climate package;
* 2015: Deadline for completion of 10-12 CCS demonstration plants.

Links
European Union

* Commission Info-box: Carbon dioxide Capture and Geological Storage (CCS)