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Saturday, July 18, 2009

The CCS buble , july 2009

Today:
  1. EU to help China bury CO2 emissions
  2. Germany agrees scaled-down CO2 capture law
  3. EU mulls €7 billion subsidy for carbon capture
A short one, but very interesting nevertheless. I hope you enjoy it.

Also, I'd like to announce that the next 2 weeks, I'll be in vacation, so I'll either post very rarely (like once a week) or I won't post at all until I get back from the Summer School I'm going to.

Quote of the day: CCS is a tough technology to crack and it's still far from being commercially available or even technologically safe. Yes, you can put CO2 wherever you want, but will it stay there and for how long? And how much energyyou'll waste to complete the process? These are important questions that nobody seems to answer.

EU to help China bury CO2 emissions

25 June 2009

The European Commission will today (24 June) present plans to spend €60 million of EU money on a carbon capture and storage project in China and other emerging economies, asking member states to chip in too.

A draft communication, seen by EurActiv, spells out plans to raise between €300 and €550 million of public financing, depending on the used combustion technology, to build a near zero-emissions coal plant.

The Commission says it has earmarked €60 million from the EU's Environment and Natural Resources Thematic Programme for clean coal cooperation between 2009 and 2013 to finance the Chinese project. A small proportion of this, around €3 million this year, will be used for cooperation with other emerging economies.

The draft document states that up to an additional €50 million could be made available for the design and construction of a carbon capture and storage (CCS) demonstration plant in China, if there is "continued political support from China and satisfactory progress with the NZEC project".

The Commission is proposing to establish a public-private partnership in the form of a "special purpose vehicle". This mechanism would enable public and private funding to be combined, while ensuring that public donors can set out policy objectives, the EU executive argues.

The Commission explained that it was targeting China for clean coal technology development due to the country's heavy reliance on coal and the advanced stage of existing cooperation.

The Commission argues that there is an urgent need for technologies like CCS in China, which gets 70% of its energy from coal. In 2007 alone, China built the equivalent of one 500MW coal-fired power plant every two-and-a-half days, according to the International Energy Agency (IEA).

Moreover, the EU and China made a political commitment back in 2005 to develop and demonstrate near-zero emissions coal technology in both regions by 2020.

Cooperation is set to enter a second phase next year, moving from initial research to determining the site's location and the combustion and capture technologies to be used, as well as the transport and storage concepts. For the next two years, the Commission plans to develop a financing model in consultation with the European Investment Bank (IEB) in order to have the plant up and running well before the 2020 deadline.

The EU executive sees the CCS demonstration project in China as a model for other technology collaboration between industrialised and developing countries in the framework of a post-2012 climate change agreement.

However, environmentalists in particular have raised the alarm over funding clean coal, saying it could jeopardise sustainable development in emerging economies in the longer term. source

My comment: The game between China and the EU obviously becomes more and more interesting. Recently I learnt that part of the problems for Galileo, the European global positioning system is, because of the ill partnership between the EU and China. I won't point the finger and blame neither of the two, but still I think we have to learn our lesson and be more careful when dealing with China. I often call for more respect when it comes to important business partners, like in the case of Russia, so I'll call for the same for China too. If you underestimate your business partner, or treat him/her badly, you can get yourself into trouble.

But anyway, let's go back to CCS. I think I repeated enough times that I think this is just another way for oil companies to suck European taxpayers money. Because let's be realistic-if we want to become energetically independent, we would finance sources we have on our soil-like wind, sun, water and so on. We will work very hard on efficiency. We will support all the alternatives sources (though, I'm suspicious towards geothermal energy), we'll work on turning biowaste into biofuel or simply heat. There are so many ways to make it. But no, we go for CCS-the only way that oil, gas and coal can stay in business. Not to mention whole companies will benefit the most. It's ok, it's normal that big member-states try to secure more money for themselves, what I dislike is the direction the money flow. CCS is a tough technology to crack and it's still far from being commercially available or even technologically safe. Yes, you can put CO2 wherever you want, but will it stay there and for how long? And how much energy you'll waste to complete the process? These are important questions that nobody seems to answer. The Commission fund a unclear technology that is likely to go nowhere. Of course, a miracle could happen and we could find a way to store that CO2, I would love it. But I still don't think that the EC should invest into something suspicious. I'd rather vote my money to go for alternatives and efficiency!

And now, we have China getting into the game. Of course, this isn't a bad idea-China is hardly relying on coal so if we want to include them into a climate pact, we'll have to secure them a way to keep their energy level. But again, I really prefered we went for renewables. Note, even China started to invest heavily into them. Then why we fund CCS?! This is an absolute mistery to me.

Germany agrees scaled-down CO2 capture law

22 June 2009

Germany's grand coalition government has reportedly agreed to a scaled-down draft law on carbon dioxide storage after conservatives objected to some of the measures.

But sources said the agreement only allows for individual test sites rather than allowing a more comprehensive framework for CCS across Germany.

The breakthrough was reached in a meeting of parliamentary floor leaders from Chancellor Angela Merkel's Christian Democrats and the Social Democrats - Volker Kauder and Peter Struck respectively - and Environment Minister Sigmar Gabriel. On Wednesday, the conservatives said they planned to delay voting on the draft law on CCS amid concerns about it.

The CCS law would pave the way for further developing technology aimed at cutting pollution from coal-burning power plants, by holding CO2 indefinitely in underground storage facilities.

The coalition has spent months wrangling over rules to regulate the efforts of utilities such as E.ON, RWE and Vattenfall Europe to test and install the technology early enough for large-scale commercial use after 2020.

Speedy progress of the law is needed to allow these firms to meet timetables for pilot plants ahead of full commercial production planned for 2020, and to ensure that CO2 taken from the plants can be piped into suitable stores by that date.

Germany derives 50% of its power from coal but without CCS will not be able to keep this up in coming years, as stringent EU laws aimed at discouraging CO2 emissions set rising financial penalties on conventional coal burning.

Meanwhile, Germany's coal importers group VDKI, based in the port of Hamburg but close to the Rhein-Ruhr region's heavy industries which it serves, is worried about the sustainability of coal burning amid public criticism of the carbon dioxide (CO2) pollution it causes.

"We argue against this with the plans for higher energy efficiency rates at coal-fired power units and the hoped-for success in capturing and storing CO2 at power stations [in a tested, but not proven, process called CCS]," chairman of VDKI, Erich Schmitz said in a conference last week.

German imports of hard coal from India, China and Indonesia are likely to fall 22% this year compared with 2008 to a total 37.3 million tonnes, the importers group VDKI said.

If new building and CCS efforts were combined and successful, German coal generators may cut CO2 emissions to 96 million tonnes a year by 2015 versus 111 million in 2008, Schmitz said.

Germany uses hard coal for 20-25% of its annual power generation, depending on demand and rival fuels. source

My comment: Once again, we see China listed as a coal importer in Germany. I think this clarifies many questions for us. I won't comment further, I just hope people realise what CCS is-just another buble what would take their money and explode. In the end, we would lose billions to figure out, the process is too complicated for current technologies and we'll continue to use coal and pollute. If only those money were invested in real technologies and material development, not for the management and building of facilities, I think we would have much bigger chane for success with CCS. And yeah, a little note-I think CCS can be imensely useful in other fields, like space technology. I just disagree with the way (and the scale!) they fund it.

EU mulls €7 billion subsidy for carbon capture

30 June 2009

The European Commission yesterday (29 June) estimated that up to €7 billion could be made available to fund carbon capture and storage (CCS) technology from the EU's emissions trading scheme (EU ETS). Meanwhile, renewables projects would get around €5 billion.

The assessment is based on projects that have been presented to the Commission so far.

Speaking at a stakeholder meeting in Brussels, a Commission official stressed, however, that there would be no upfront earmarking of money between CCS and renewables when the 300 million allowances, set aside in a so-called 'new entrants reserve', are allocated. Instead, funds will go to viable projects only.

The new entrants reserve is intended to pay for the incremental investments that utilities make in CO2 capture facilities, or for setting up renewable energy projects that are not yet commercially viable. As the ETS puts a price on CO2, the free allowances thus become direct subsidies to industries, provided that they share their knowledge with new businesses to get pioneering technologies off the ground on a commercial scale.

The issue at stake now is ensuring that the reserve generates the maximum amount of money, and that criteria are set for determining where it is allocated.

As one observer pointed out yesterday after the meeting, it is still early days in the debate, with different interest groups lobbying for as much money as they can. While the electricity industry called for clear priorities on CCS, environmentalists in particular have pointed out that only a clear shift to renewable energy can halt dangerous global warming.

The Commission is facing a difficult task in presenting fair criteria for allocating the allowances, as the scale of CCS and renewables differs widely. For each group of low-carbon technologies, the EU executive plans to introduce different criteria, which are not directly comparable.

A Commission paper issued earlier this month (EurActiv 10/06/09) points out that of 27 different categories of innovative renewables, the largest project provides 50MW of power, while CCS on the other hand offers up to 250MW.

According to participants in yesterday's meeting, the Commission is now planning to introduce both minimum and maximum requirements for eligible projects. This could then potentially exclude some smaller renewables projects upfront.

A call-back clause may also be introduced to ensure that the funded projects really deliver CO2 cuts. The Commission is reportedly in favour of such a provision, which would require utilities to start returning the funding should they prove to be unable to demonstrate that they are achieving their key objective.

The funding will most likely be distributed through two calls for tender, as supported by member states. At first, the EU would only allocate some of the allowances, leaving room for assessment before the second call is issued.

The revised ETS directive states that the 300 allowances from the new entrants' reserve will only be available until the end of 2015. Some observers noted, however, that there is pressure from some member states to extend it to projects that might not begin operating before 2015.

Both environmentalists and the CCS lobby, however, point out that the EU's ambitious 2020 climate targets require urgent action, and any project that delivers after 2015 cannot be used as a model for further commercialisation. On CCS, the EU's target is to have 10-12 demonstration plants up and running by 2015, which means that construction "should have started yesterday," one stakeholder argued.

Ultimately it is EU governments that will decide the course of action, as the eligibility criteria are set by the 'comitology' procedure in Council working groups. The Commission wants a quick decision and is seeking a Council committee vote on full criteria in the autumn, in order to publish a shortlist of projects by mid-2010.

Germany and the UK are already showing signs of a "typical big member state point of view," according to one party to the talks. They have indicated that the allowances should be allocated to each country based on population or size of emissions, for example, which would favour larger countries.

This differs wildly from the Commission's proposal, which suggests that a project-to-project basis will achieve the best value for money.source

My comment: Not much to say, the article says it all! I hope you realise how important moment we're going trough! And I fully support the idea of the Commission that projects should return the money if they prove to be not-working! Although this could scare off some of the projects, when you take billions, it's obvious you have to deliver. Otherwise, try with University grant or FP7!

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