The European Parliament’s Environment Committee voted on 7 October in favour of Emissions Performance Standard legislation designed to limit the amount of carbon dioxide power plants can emit from 2013, and new from 2015, which is likely to put pressure on the industry to step up investments in carbon capture and storage (CCS) technology.
The limit set on new power plant emissions is proposed at 500g CO2/kWh from 2015. This limit will effectively rule out all coal-fired plant not fitted with carbon capture and storage technology and is likely to have a severe impact on Europe’s plans for around 50 new coal-fired plants.
The limit, which has to be agreed both by the full European Parliament and the EU member states, is intended as an incentive to accelerate CCS development. But a recent study by the consultancy McKinsey forecasts that CCS could be commercially viable by 2030, but that it would require substantial public subsidies to get the 10-12 CCS plants, as targeted by the European Commission, running by 2015. McKinsey said it expects coal to make up 60% of Europe’s power generation by 2030, underlining the importance of fast-tracking the commercial development of CCS technology.
The EU ENVI Committee voted as follows.
It gave its backing to all but one of the compromise Doyle amendments. The Doyle report was adopted with 44 votes in favour, 20 against with one abstention. The main elements of the report that were adopted are:
• The power sector should be obliged to obtain 100% of CO2 permits at auction after 2013;
• Energy-intensive industries should be required to obtain 15% of emissions permits at auction in 2013, with a gradual phase-in towards 100% auctioning by 2020 (a 5% decrease compared to the Commission's initial proposal for a 20% auctioning requirement);
• 500 million spare emissions allowances, normally reserved for new entrants into the EU ETS scheme, should be made available as an incentive/financing measure for large-scale commercial carbon capture and storage (CCS) demonstration plants;
• The threshold for installations affected by the EU ETS should be raised from 10 000 to 25 000 tonnes of annual CO2 emissions;
• 100% of member states' auction revenues should be set aside or 'ring fenced' for climate-related purposes, whereby half of the money should be earmarked for developing countries;
• Installations should be able to achieve at least 40% of their targets through the financing of emissions reductions projects in third countries under the Kyoto Protocol's Joint Implementation and Clean Development Mechanisms (JI/CDM), but stricter rules on the validity of CDM projects would need to be respected;
• Up to 5% of emissions reductions could be obtained through the preservation of forests in developing countries under the condition that an international climate deal is in place.
The Committee backed the Davies report which created a legal framework for CCS that would require member states to set limits on the CO2 performance of power stations: after 2015, power plants' emissions cannot exceed 500 kg of CO2 per kWh.
The vote will serve as the Parliament’s position when it starts negotiations with national ministers next week in preparation for a final agreement later this year or early in 2009. The French presidency is keen to reach agreement before its term ends at the end of this year, but some eastern European states are raising concerns about the energy and climate package.
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