EU Reviews New Carbon Rules

Improved comprehension by industry regarding state aid rules and inclusion into the EU’s carbon-trading scheme were among the features of new proposals on carbon capture and storage (CCS).  They were put forward by the Commission in its climate and energy package last week. However, doubts remain about whether this expensive will reduce the bloc’s CO2 emissions.

Carbon capture and storage (CCS), also known as carbon sequestration, is the process by which carbon dioxide (CO2) is separated from the gases produced by large stationary power plants.  It is compressed and then transported to a location where it can be stored in geological formations or ocean bedrock.

CCS technology is available but remains expensive, with widespread commercial use not expected until 2020 or even 2030.  The Commission’s proposals endorse CCS by removing a number of important obstacles that previously blocked the development of the technology.

First, the EU’s guidelines on when member states are permitted to subsidise industries were expanded to allow for the potential inclusion of CCS.  Second, CO2 that is captured and stored will be credited as “not emitted” under the EU Emissions Trading Scheme, a provision many firms consider crucial in order to justify the investments necessary.