Scott Brockett

Unit ‘Energy and Environment’

Directorate-General Environment

European Commission

Modalities for demonstration of CCS and innovative renewables under the Emissions

Trading Directive Article 10a paragraph 8

Specifications in the legislation

• Max 300 million allowances• Available only until 31 Dec 2015 for allocation• Maximum 12 CCS plants plus innovative renewables• Support dependent on verified avoidance of CO2

emissions• Support to be given via Member States• Projects in geographically balanced locations and

representing a wide range of technologies• Project selected on the basis of objective and transparent

criteria that include requirements for knowledge-sharing.• No more than 15% of allowances for any individual

project.• In principle, no more than 50% of incremental costs of

CCS to be financed.

CCS and renewables

• Treatment of CCS versus renewables projects

– Ex ante apportionment of 300M allowances between the two groups

• How determined?

– Competitive process, where proportion of funds devoted to each technology will depend on the merit of projects

Selection of projects 1

• Selection of projects– Establishment of categories

– Eligibility criteria:• Scale (MW)/scaling up?• Capture rate/avoided CO2?• Date by which operational (end 2015)?• Project maturity (Front End Engineering Design

study)?• Core requirements on knowledge-sharing?

– Further characterisation of innovative renewables?

Selection of projects 2

• Selection and award criteria– Financial and technical adequacy, permitting– Project quality and requested funding– Speed of deployment (in addition to/instead of eligibility

requirement)– Knowledge-sharing (in addition to/instead of eligibility

requirement)

• Selection at EU or MS level– EU level: standard competitive procedure– MS level: how organised?– Either level: how to ensure geographical balance?

Disbursement of allowances

Options– Allowances are auctioned at EU level, and MSs pass

funds to operators.– Allowances are auctioned at MS level, and funds passed

to operators.

Conditional on avoided CO2– Disbursement when project operational and CO2

avoided?– Up-front disbursement with dissolution clause if no/less

CO2 is avoided?

TIming

Development of modalities

• Comments on key issues requested by 13 March• Commission informal proposal to Climate Change

Committee/WG3 as soon as possible thereafter• Iterative discussions with WG3/Climate Change Committee• Stakeholder consultation• Interservice Consultation• Proposal for vote to CCC• EP scrutiny period of 3 months• Aim for adoption by Commission end 2009

Project selection and award

• Call for proposals deadline mid 2010• Selection of proposals and allocation of funding end 2010