Verbatim report of proceedings

Monday, 17 November 2008 - Strasbourg

27. Supporting early demonstration of sustainable power generation from fossil fuels (short presentation)

  President. – The next item is the report (A6-0418/2008) by Mr Christian Ehler Ehler, on behalf of the Committee on Industry, Research and Energy, on supporting early demonstration of sustainable power generation from fossil fuels (2008/2140(INI)).

  Christian Ehler, rapporteur. – (DE) Mr President, ladies and gentlemen, as a Brandenburger I would of course particularly like to greet Mrs Hübner. I would like to give a brief overview of the Committee on Industry, Research and Energy’s report on a Commission communication on CCS demonstration facilities. If we are to meet the energy and climate change targets adopted by the European Union, it is clear that one of the most decisive factors is reducing CO2 emissions, in which connection coal, as a fossil fuel, has an essential role to play. On the other hand, we in Europe are currently faced with a dilemma. We have three goals in environment and energy policy: the first is environmental protection, the second is security of supply, and the third is price stability, which goes hand in hand with security of supply and is particularly important in economically difficult times such as these.

It is clear to all of us in Europe that coal is the only fossil fuel, Europe’s only fossil energy source, that is thus strategically important for these three goals. However, without CCS technology, in other words without clean coal technology, this fuel will have no future. The Commission’s proposal to support the urgently needed demonstration projects is therefore welcomed by the majority of the committee. The Commission has put a very sensible proposal on the table. We need – and the majority of the committee agrees on this – to provide incentives as quickly as possible for the use of CCS technology on an industrial scale. However, a majority in Parliament therefore feels – and we have said this quite explicitly – that financial support for clean coal technology is absolutely indispensable to Europe's energy and climate change goals.

The proposal by the Committee on Industry, Research and Energy is therefore very specific, with funds from the Seventh Framework Programme on research and also from anticipated emissions trading allowances to support the construction of at least 12 demonstration facilities. These facilities need to combine the various technologies with the various storage and transport options, and they should be spread as widely as possible across Europe.

We are cautiously optimistic to see the first signs of movement from the Commission in the current trilogue negotiations on the CCS and ETS Directives. With the same cautious optimism, we take the view that we must manage, in the trilogue negotiations, not just to clarify the future framework conditions for CCS but also to lay solid foundations for funding the vital preliminary trial facilities.

  Danuta Hübner, Member of the Commission. − Mr President, I thank Mr Ehler very much for his report on the communication of the Commission on supporting early demonstration of sustainable power generation from fossil fuels. We appreciate the general support in the report for our policy objectives and for the recognition of the important role CCS can play in combating climate change worldwide.

The report also clearly recognises the urgent need for up to 12 large-scale demonstration projects to make CCS commercially viable by 2020. Our communication has to be seen as a part of the complete and comprehensive climate and energy package which includes the CCS Directive, which sets the legal framework for allowing operation of CCS technologies in Europe, the emission trading system, which provides the economic and commercial framework for CCS, and the Commission’s proposal that suggests that 20% of the auction revenues are earmarked by Member States for investment in low-carbon technologies, such as CCS. No matter what the final decision is, the auctioning revenues will be one of the substantial financing sources for CCS demonstration projects.

Finally, our communication also suggests the creation at the beginning of 2009 of a European coordination structure to support CCS demonstration projects through knowledge-sharing, joint communication activities and other joint actions.

I appreciate your general endorsement of the climate and energy package and especially the communication. However, the report also states that the efforts of the Commission might not be sufficient to reach the aim stated by the Council of having up to twelve demonstration projects. I understand this concern.

To address the financing issue, an amendment to the ETS proposal has been adopted by the Committee on the Environment proposing to use EUR 500 million allowances from the new entrance reserve to finance CCS demonstration projects.

The Commission has sent a policy option paper to Parliament in order to help build consensus in the Council, too, to ensure sufficient financing of low-carbon technologies.

In the report two other issues are also raised with which the Commission cannot fully agree at this point in time. First, the report calls on the Commission to produce a detailed assessment of the costs and the share of private and public funding of each of the twelve demonstration facilities. Let me say in this context that the demonstration projects will only be identified after competitive tenders organised either at European or at Member State level. Cost assessments are currently underway but they can only provide rough cost estimates as each project is unique.

Secondly, it also suggests the use of resources from the risk-sharing finance facility to support CCS. As resources here have been fully committed, as you know, any change would require amendments to the Seventh Framework Programme.

So let me conclude by thanking you for the excellent work on the report, and I hope also that Parliament will keep the overall direction and objectives of the report in the vote.

  President. – That concludes this item.

The vote will take place tomorrow at 12 noon.

Written statements (Rule 142)

  Adam Gierek (PSE), in writing. – (PL) Mr President, Commissioner, one of the European Union’s goals is an ambitious climate protection plan up to 2020, known as the 3 x 20 objective. The instruments for its implementation include the introduction of auctioning into the emission trading scheme and of CCS technologies after 2015. However, the emission limit of 500g CO2/kWh to be imposed after 2015 is technically unachievable, even for modern coal-fired power plants. It would therefore represent a sort of moratorium on building coal-fired power stations, and thus endanger energy security.

CCS technologies could also be used in industries which generate large CO2 streams as a waste product, for instance in pig iron smelting. For this reason, Member States most dependent on coal should even now start building demonstration plants, so as to acquire the relevant experience. This will require immediate financial support, since any funds generated by emission trading after 2013 will arrive too late. In Poland, for instance, we should now be building two to three such facilities using different CCS technologies. What I have in mind are modern hard coal- or brown coal-fired power plants using different methods of CO2 storage in porous geological formations or underground reservoirs.

  András Gyürk (PPE-DE) , in writing. – (HU) The question of carbon dioxide capture and storage is today an indispensable part of the discussions about climate change. We are talking about a very promising technology, which nevertheless has yet to earn the trust of society. Its future utilisation could serve as a sort of realistic compromise between the unavoidable use of fossil fuels and the aims of climate protection.

Since carbon dioxide capture presupposes considerable long-term investments, it is crucial for the European Union to establish a consistent, stable legal framework. I think the climate package as amended by Parliament points in all the right directions in this regard.

In a commendable turn, the relevant Parliamentary report proposes issuing free emission quotas to the 10-12 experimental power plants, instead of giving direct financial support. I deem it imperative that the power plants entitled to free quotas be designated by the European Commission according to the principle of regional balance. I agree with the rapporteur that in order to promote the new technologies, sources for new research and development must be substantially strengthened – at both Member State and EU levels.

EU support cannot be a substitute for efforts by the private sector. Provided that carbon capture and storage is really a viable solution, there will be companies willing to take an active role in making the necessary investments. In addition, it is important to note that support for carbon capture should not divert funds from sustainable energy sources. The technology being discussed here may be feasible but is by no means the only solution for limiting the effects of climate change.