Bloomberg News

U.K. Carbon-Capture Plans Miss Out on First Phase of EU Funding

November 30, 2012

U.K. plans to build carbon-capture and storage plants missed out on financing from the first phase of a 1.5 billion-euro ($2 billion) European Commission program after failing to secure funding guarantees from the government.

“We didn’t get into the first round of NER300 funding,” U.K. Energy Secretary Ed Davey told lawmakers yesterday after presenting a bill to overhaul the power market to Parliament. The projects will still be able to access a second round.

Carbon-capture developers in the U.K., which pitched the Teesside and White Rose ventures in northern England for funds, had sought more time from the commission to obtain government guarantees to ensure eligibility. At stake was about 600 million euros in first-phase cash, according to the European Parliament.

Britain missed out because it failed to provide adequate commitments for its proposals, Chris Davies, a member of the EU Parliament’s Environment Committee, said today by telephone. “It’s a kick in the teeth for many, many British companies working on plans to develop CCS,” he said.

Davies blamed divisions in the coalition government for the failure to guarantee projects.

While the European Commission has made no formal announcement, discussions indicate Britain is unlikely to receive CCS funding in the first round, the U.K. Department of Energy and Climate Change said by e-mail, without giving a reason. Britain remains committed to CCS, it said.

Carbon-capture technology, which works by siphoning off polluting emissions from power stations and factories for permanent burial underground, is yet to operate on a commercial scale at electricity plants.

France’s Alstom SA (ALO) and Britain’s Drax Group Plc (DRX), partners in the White Rose venture, asked the commission this month to defer the first round for a “few months” as they negotiated with national governments.

Davies said today the funds available in the second phase would be “tiny” by comparison.

To contact the reporter responsible for this story: Sally Bakewell in London at Sbakewell1@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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