June 18 (Bloomberg) -- Carbon capture and storage, a way of cutting emissions from industry by burying them underground, needs more state support for the European Union to meet clean-energy goals, a Royal Dutch Shell Plc adviser said.
“We’ve got to be clear that the EU’s climate goals in the long run cannot be met without clear policy intervention and that CCS is vital for the delivery of that,” Graeme Sweeney, who advises Shell on carbon-dioxide strategy, said by telephone.
The EU is debating energy policy for the next decade as power utilities and industry seek clearer legislation to commit investments. While CCS may provide a cost-effective way to cut CO2, projects in the bloc have stalled as debt-strapped nations struggle to fund construction. At stake is a binding EU target to cut greenhouse gases 20 percent from 1990 levels by 2020.
“We’ve made limited progress,” Sweeney said. “It’s time for us all to recognize that we really need a reset if we’re going to make all of this work.”
The first phase of a European Commission program to finance as many as 12 demonstration plants failed to fund a single one as member states were unable to supply the required matching funds by the deadline. Nine projects applied for funding under a second round that closes July 3, the commission’s website shows.
Sweeney sees a possible three to five demonstration projects being built in the EU, putting it on course to start commercial CCS plants in the late 2020s or early 2030s. He’s also chairman of the European Technology Platform for Zero-Emission Fossil-Fuel Power Plants, or ZEP.
The ZEP group includes Shell, which plans a CCS project in Scotland with SSE Plc. The partners, chosen as preferred bidders in a U.K. funding competition in March, intend to trap 90 percent of emissions from the Peterhead power station in what would be the world’s first commercial CCS demonstration at a gas-fired plant.
Efforts to develop CCS also have been set back by an oversupply of carbon permits on the EU market, which pushed down prices for the allowances to an all-time low in April, weakening the incentive to invest in cutting emissions.
EU leaders must agree on a plan to reduce the surplus, Sweeney said. He also called for an innovation fund to finance projects and a certificate-based incentive system to pay for CCS plants as they operate. Projects could also get unspent money from the European Energy Program for Recovery, a fund set up in 2009 to boost reliability of supply and cut emissions, he said.
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