EU invests in China carbon capture facility

By Joshua Chaffin in Luxembourg
Published: June 25 2009 14:09

The European commission on Thursday announced plans to contribute up to €50m ($70m, £43m) to help China build a facility to test carbon capture and storage technology.
While relatively small, the commission said the investment illustrated the European Union’s commitment to speeding the transfer of green technology to developing nations to further the fight against global warming.

China, in particular, is a top priority for CCS, which aims to trap carbon emissions from power plants and industrial facilities and bury them underground, because the country relies on coal for 70 per cent of its energy.
In 2007, China built the equivalent of one 500 megawatt coal-fired power plant every two-and-a-half days, according to the International Energy Agency, making it a central battleground in the effort to curb global warming.
“We have taken action to put in place the regulatory framework and the incentives to facilitate CCS demonstration in Europe and now we are making good on our promise to China,” said Stavros Dimas, the European environment commissioner.
Mr Dimas called the investment a “model for cooperation” in the run-up to a December summit in Copenhagen, where world leaders will try to agree a global deal to reduce greenhouse gas emissions.
Those negotiations have been bogged down so far in disputes about how much money developed economies such as the US and EU should contribute to China and other developing nations to help them reduce emissions and cope with the effects of global warming.
The agreement was announced as European environment ministers gathered in Luxembourg, where a discussion of the bloc’s negotiating position heading into Copenhagen was high on the agenda.
The commission estimated it would cost €730m to €980m to build and operate a CCS-equipped power plant in China. It said it would work with member states and the private sector to try to secure additional funding.
Earlier this year, the EU agreed to devote €1.05bn to help fund up to a dozen CCS pilot plants. CCS also got a boost in December, when heads of state agreed to set aside some of the revenues from carbon permit auctions to help fund plants. Depending on the price of carbon, those revenues cold total some 6bn to 9bn euros.
The support for CCS has drawn criticism from environmental groups and members of parliament, who have argued that the resources should instead be devoted to renewable energy, such as wind and solar, and efforts to improve energy efficiency. Some have also questioned whether the technology can be effective on an industrial scale.
However, the commission, the IEA and other proponents maintain that CCS will be vital until those technologies mature – particularly as China, India and other emerging economies burn abundant coal reserves to power their development.
Copyright The Financial Times Limited 2009