After no winner was declared in the first round of a contest staged by the European Commission to fund carbon capture and storage (CCS), the search for emissions cutting technology is looking bleak. At least for the time being. Skeptics say the technology may not yet exist to cut carbon emissions.
However, the European Commission is giving CSS developers an opportunity to resubmit bids for a second round that should be concluded by 2014.
Funding gaps or a shortfall in meeting criteria meant that none of the short-listed projects made final selection. Even steelmaker ArcelorMittal withdrew its application for a French project, citing technical problems.
Stuart Haszeldine, a professor of CCS at Edinburg University believes this is a catastrophe for EU climate policy. 200 million carbon allowances have been sold for 1.5 billion euros, of which the Commission set aside 275 million euros for CCS projects. Now, they will hold onto this sum until the next round of bidding, when revenues of the sale for 100 million allowances will be assigned. These allowances trade on the EU Emissions Trading Scheme and provide the right to emit 1 metric ton of carbon dioxide. Since it will be a technical decision, experts say it is impossible to speculate on a date for the auction of remaining allowances.
Despite the fact that CCS is commercially unproven and expensive to build, governments that seek to curb emissions from the carbon-intensive power industry want it to make a contribution in future.
The EU feels pressure to replicate the US experience of reducing coal demand and is concerned that this may set the endeavor back significantly. In fact, some experts do not believe CCS will even play a role until at least 2017. According to International Energy Agency estimates, coal will come close to surpassing oil as the world’s top energy source by 2017. This paints a gloomy picture in the fight against climate change.