9 th Coal Dialogue. Prospects for the EU demonstration projects: how to ensure financing. Reinhold Elsen, ZEP. 6 June 2013, Brussels

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1 9 th Coal Dialogue Prospects for the EU demonstration projects: how to ensure financing Reinhold Elsen, ZEP 6 June 2013, Brussels

2 1. Who is ZEP? European Technology Platform for Zero Emission Fossil Fuel Power Plants Founded in 2005, the European Technology Platform for Zero Emission Fossil Fuel Power Plants (ZEP) is a unique coalition of stakeholders united in their support for CO 2 Capture and Storage (CCS) as a key technology for combating climate change. ZEP serves as advisor to the European Commission on the research, demonstration and deployment of CCS. The European utilities, petroleum companies, equipment suppliers, scientists, academics and environmental NGOs that together form ZEP have three main goals: Enable CCS as a key technology for combating climate change. Make CCS technology commercially viable by 2020 via an EU-backed demonstration programme. Accelerate R&D into next-generation CCS technology and its wide deployment post-2020.

3 2. Role of CCS in the EU CCS in the current EU policy context EU Energy Roadmap 2050 confirms role of CCS in decarbonising Europe cost-effectively CCS supported in the Commission s CCS communication and Green Paper and in the post 2030 Climate and Energy Framework Costs of meeting global climate targets 40% higher without CCS, according to the IEA

4 3. Demonstration projects needs & status The need for CCS demonstration projects To make CCS a key contributor for a low carbon economy, it needs to be made commercially available in the twenties and widely deployed by 2030 Final demonstration project decisions need to be made in short term in order to keep Europe in the race Deployment cannot wait until

5 3. Demonstration projects needs & status Obstacles to ensuring sufficient demonstration of CCS in the EU No materialised CCS funding in 1st tranche of NER300 funding no confirmed CCS demonstration projects in Europe Lack of public acceptance and political support in member states Limited understanding of the commercial and technology challenges associated with CCS Currently low CO2 prices lead to lack of business case for CCS demonstration and later commercial deployment Failure to adequately recognise and reward the early movers seeking to invest in the first projects Intensive promotion of renewables in some member states and unequal conditions for RES and CCS No clear confidence that energy and climate policy will deliver a viable and vibrant CCS market Lack of long term investment signal from the EU ETS and policies that can drive investment in CO2 transport and storage infrastructure 5

6 4. ZEP key recommendations (1) Delivering CCS has to be a priority or the EU is likely to miss its own long term CO2 reduction targets EU CCS demo projects are ready for activation but need sufficient financial support in order to take investment decisions CCS ought to be a top priority for NER300-2 funding Governments should provide co-funding especially infrastructure to ensure that demonstration projects are up and running in Europe to keep us on the right track towards commercial deployment EU and Government have to support industry and expand measures to improve public acceptance 6

7 4. ZEP key recommendations (2) Need for a clear political statement of strategic intent to provide confidence to industry for CCS demonstration and deployment in Europe Europe must incentivise a successful CCS demonstration programme between 2015 and 2020 A robust ETS is important, however, we need a predictable driver for CCS. We need additional support schemes for demonstration plants and in the long term a market driven development mainly based on a volume based ETS. Need for continued engagement and dialogue with all stakeholders at EU and national level 7

8 THANK YOU