About

"NER300" is a financing instrument managed jointly by the European Commission, European Investment Bank and Member States, so-called because Article 10(a) 8 of the revised Emissions Trading Directive 2009/29/EC contains the provision to set aside 300 million allowances (rights to emit one tonne of carbon dioxide) in the New Entrants’ Reserve of the European Emissions Trading Scheme for subsidising installations of innovative renewable energy technology and carbon capture and storage (CCS). The allowances have been sold on the carbon market and the money raised — 2.1 bn EUR — will be made available to projects as they operate. More information is available under the tab Basics. Official information is available on the Commission website here.

NER300.com is an unofficial, independent portal dedicated to renewable energy and grid integration projects wishing to access this instrument, providing
  • News
    ...to keep you up to date with the latest developments, key dates and deadlines
  • Analysis
    ...understand the NER300 instrument and how to use it for your project
  • Access to consultancy
    ...for specific guidance for your proposal.
May 25 2016

NER400 Innovation Fund Impact Assessment reveals interesting information about NER300

An ‘Impact assessment’ is an explanatory document released by the EC alongside a legislative proposal to provide substance for the policy choices made in the proposal. This article refers to the Impact Assessment of the EC’s 2015 proposals for revision of EU Emissions Trading Scheme.

Maximum upfront financing was limited to 60%

“Maximum 60% of the awarded NER 300 funding can be provided as upfront funding”

This policy had been stated orally by ex-NER300 Head of Unit Piotr Tulej in a meeting with Member States and Project Sponsors on 10 April 2013.

By Jul 2015 the NER300 pot had swelled by 23 M EUR from asset management

The EC reveals that in 2014 23 M EUR was yielded from investment of the money not yet paid out to projects, and claims that this exceeds by “several times” the cost of “the EIB’s involvement” in NER300. It also says,

“All available funds resulting from the monetisation of 300 million allowances are now allocated to awarded projects, with the exception of a minor surplus of €2.6 million.”

  1. NER300.com’s comment

    The phrase concerning the cost of the EIB’s involvement is misleading: in a summary paper referenced by the EC in the Impact Assessment, the EIB writes, “The EIB sold 300,000,000 EUAs for a total value of EUR 2,156,830,800 EUR (before deduction of expenses and EIB fees)”. The sum of the total awards made to projects is 2,104,867,924 EUR. If the surplus is 2.6 M EUR, then the cost of administering NER300 (excluding the time of EC personnel) is 49 M EUR, which is double the income so far from asset management. This is consistent with the amount of 34,729,701 EUR used by the EIB to cover “expenses, market fees and its own fee” in the first round, an amount which is disclosed in the above-referenced paper.

We now know what the EC’s ‘eligibility check’ consisted of

As part of the eligibility check, projects were screened for innovation. The EC “estimate[s] that almost 80% of the NER 300 awards went to highly innovative or even potentially game changing projects.” An early draft of the Impact Assessment (which leaked) is more explicit: they were scored 1-4, one presumes according to the same scheme described in footnote 99 of the final version: “1. Little or no innovation 2. Some innovation demonstrated, but mainly incremental 3. Highly innovative project for some component or aspect of technology 4. Highly innovative project that is likely to represent a game changing step in technology.”

To determine eligibility, the EC performed “a qualitative analysis […] based on difference of the project’s technology from existing solutions, availability of the project’s technology amongst other vendors, availability of previous tests for the chosen technology, potential for scale-up and replicability and availability of resources to be used by the project.”

Project sponsors were never officially told their eligibility score, nor what the EC considered distinguished their technology from “existing solutions”, or of the EC’s assessment of the “availability” of the technology their projects would use.

  1. NER300.com’s comment

    With the existence of such information now confirmed, Project Sponsors will find it easier to request access to it in respect of their projects. They need to ask for the “report on the verification of Eligibility Criteria Assessment”, which, for first-call projects appears as item 22 on Table 1 at para 80 of the first-call Procedures Manual, or, for second-call projects, as item 14 on the table at para 69 of the second-call Procedures Manual.

White Rose’s award of 300 M EUR was 34% of its relevant costs

…meaning, from arithmetic, that its relevant costs were around 880 M EUR. According to NER300.com’s calculations and on the assumption that the NER300 project corresponds to the full 448 MWe project described here, the ‘relevant costs’ are about the same as the extra investment costs of applying CCS on the White Rose plant. This is because the ‘avoided cost’ of not having to buy CO2 allowances for the sequestered CO2 corresponds roughly to the additional cost of the coal needed to power the sequestering process.

EC declined half of applications for upfront finance

“It should be noted that although not all projects that required upfront funding were granted it this has not jeopardised their implementation. (Six projects awarded under the second NER 300 call applied for upfront funding but only three received it.)”

May 25 2016

Session on NER300 at European Geothermal Congress 2016 on 21 Sept

On Weds 21 Sept 2016 in Strasburg, the three NER300 Project Sponsors in geothermal energy will present their “state of play and current developments” as part of EGC 2016.

The session begins at 16:30 with a presentation of NER300 including its knowledge-sharing rules by DG JRC (to be confirmed).

Link to the conference homepage

May 25 2016

Project Sponsors sending feedback to EC on NER300 via survey

The consultants hired by the EC to help it analyse the implementation of the NER300 funding programme (see contract award notice of 31 Dec 2015 and specifications) have created an online survey for Project Sponsors to fill in. Access to the survey is restricted to Project Sponsors.

ICFI, SQ Consult, Vito and their client DG CLIMA (who will have direct access to individual answers) commit to keeping the responses secret.

The survey’s questions are available here. They explore many aspects of NER300’s functioning. Although the deadline for responses was 20 May, the survey appears still to be active.

Apr 17 2016

Launch of NER400.com

NER300.com has a sister site, NER400.com, providing information on the NER400 Innovation Fund currently at an early stage of development.

Mar 24 2016

No more big changes to first call projects allowed

In a letter to Member States dated 22 March 2016 the EC has told them, “We are of the opinion that changes to projects funded under the first call of NER300 […] are not feasible any more.”

This is traditionally the time of year that DG CLIMA invites Member States to make known any changes that Project Sponsors wish to make. The changes may be very substantial, involving changes in project location, Project Sponsor and financial performance. But because in DG CLIMA’s words “there are only 9 months left” for first call projects (i.e. awarded in Dec 2012) to meet a major deadline of 31 Dec 2016, the EC is minded to withdraw the possibility to propose big changes.

By 31 December 2016 all awarded projects from the first call are required to have reached a ‘Final Investment Decision’ based on the financial model of the project that will actually be built, secured all relevant national permits (e.g. for construction or grid connection) and secured the approval by the EC (DG Competition) of any State Aid that will be given to the projects.

It typically takes the EC 4-5 months to declare whether it accepts proposed changes to projects.

Nov 04 2015

NER300 presented at Ocean Energy Europe 2015 conference

Kerstin Lichtenvort, Co-ordinator for the implementation of the CCS Directive and the NER300 funding programme at the European Commission, presented NER300 to the Ocean Energy Europe 2015 conference (Dublin 21 Oct, session “Public Funding for Ocean Energy: Breaking Through to the Mainstream”).

She said two projects would reach Final Investment Decision in 2015, with another four expected to do so in 2016. The 39 awarded projects in the programme have, in her view, “a lot of multiplication impact”. She said thought must be given to “how the performance of such an important programme for innovation should be measured”.

The EC launched the debate with the Council and European Parliament on the successor to NER300, NER400 Innovation Fund, with its proposal of 15 July 2015. “At the moment it’s more the discussion ‘if we will have this Fund’,” Lichtenvort said. Secondary legislation will cover “technical details”.

Lichtenvort said, “If you read the ETS proposal carefully you’ll see it says ‘support’ instead of ‘grant’.” She invited feedback on whether “financial instruments”, including loans or equity, should be given to projects or if the financing should continue to be provided through grants.

Oct 19 2015

Delays to NER300 projects revealed

Following an ‘access to documents’ request, the EC has published the amended Award Decision that details the current status of NER300 projects selected in the first and second calls.

The document shows changes to the dates that projects intend to begin operating and to the manner in which their award is paid to them, as well as, in two cases, changes to the project name and reductions in the award.

The updates reflect the wishes of project sponsors and their host Member States as at late spring 2015, when the EC initiated this year’s annual process to amend the Award Decision.

Delays

25 RES projects out of 38 have requested a change, including, invariably, a later ‘date of entry into operation’. Of those 25 projects, the mean delay to entry into operation is of 27 months. This figure excludes any requests for extensions already granted to first-call projects in January 2014.

This means that now 17 projects, which is 45% of all projects, are right up against the latest possible date of entry into operation according to current NER300 rules. This compares to 13% in 2012 and 34-36% in 2014. All French, Spanish, Cypriot and Greek projects are in this position.

Money for construction

More and more projects wish to take advantage of the ‘upfront funding’ possibility, where the award is paid in advance, with the risk that it will need to be paid back if the project underperforms. Five projects were granted this in 2015 (the EC suggests half of all requests are declined — see Impact Assessment).

Further interesting features of the Amended Award Decision

  • UK OCNb Kyle Rhea Tidal Turbine Array changed its name from ‘Kyle Rhea’ to ‘Stroma’. The most likely reason is to reflect a change of the project’s location as both names refer to places. This is supported by the fact that the project’s award was reduced in January 2014 because of a reduction in its ‘Relevant Costs’, which is to be expected if the new site has a better tidal stream resource than the original one.
  • The award of PVa concentrated PV project PT PVa Santa Luzia Solar Farm has been reduced. This implies the Project Sponsor has recently taken his Final Investment Decision, even though the project will only enter into operation in mid-2019.
  • Among the seven countries that successfully lobbied for two-year extensions to some key NER300 deadlines, including projects’ date of entry into operation — France, UK, Germany, Italy, The Netherlands, Sweden and Finland — The Netherlands and Italy did not subsequently go on to apply for extensions for any of their projects.

The text of the EC’s amended Award Decision is available here. A file showing the evolving status of each project is available here.

Three projects are operating, two in bioenergy (IT BIOg BEST, DE BIOh Verbiostraw) and one in wind energy (SE WINf Windpark Blaiken).

The CCS project, White Rose, did not request an extension, but the deadline for doing so had passed before Drax announced its pull-out. Also, the result of UK’s CCS Commercialisation competition is not yet known. White Rose is one of two entries in line, potentially, for 1 bn GBP of capital funding.

Oct 02 2015

White Rose CCS project down but not out

***UPDATE 18 Apr 2016: ICIS reports that on 14 April 2016 White Rose was refused planning consent, further jeopardising the project.***

***UPDATE 26 November 2015: All UK CCS projects are dealt a severe blow by the UK government’s cancellation of the CCS Commercialisation competition, which would have awarded 1 bn GBP in funding to large-scale CCS demonstrations.***


The future of the UK’s White Rose CCS project is in doubt, and with it up to 300 M EUR of NER300 money. Drax, one of the consortium of three companies developing the project, announced that it would not join its partners in proceeding to the investment phase.

Speaking on the UK radio show, The Today Programme, Drax CEO Dorothy Thompson said she “thought [White Rose] was a really good project and important technology”, but Drax lacks the cash to construct. “We’re in a different financial situation today than we were two years when we decided to invest in the [White Rose] project. There have been some changes to the government’s renewable policy but there have also been dramatic movements in the commodity markets that have greatly reduced our profitability. The government has removed a tax exemption for renewable power sold to industry and we’re the largest generator of renewable power in the UK,” she explained.

The CEO is referring to the climate change levy, which is a tax on UK business energy use (details on OFGEM website — UK electricity market regulator). Businesses could escape the tax by handing in Levy Exemption Certificates covering their energy use. Until 1 August 2015 (when a change in the law came into effect), a renewable energy supplier like Drax could create Levy Exemption Certificates, which it could sell to its customers for a price up to the value of the tax. Drax had warned in July that it expected its revenue to drop by 30 M GBP in 2015 and 60 M GBP in 2016 because of the end of LECs.

Carbon Pulse reported that the other two partners in the White Rose consortium, Alstom and BOC “were committed to completing the project”. Drax, meanwhile, will pursue “rapid decarbonisation with the deployment of the latest biomass technology, which is the most affordable, reliable and fastest way to move away from fossil fuels.”

Bellona, a pro-CCS NGO, said Drax is one of many utilities seeking capacity payments in order to survive. Bellona decries such payments “as a form of blackmail to ‘keep the lights on'” and would prefer to see an electricity market design that would encourage Drax to invest in CCS instead. Its statement is here.

Drax’s press release is here.

Jan 09 2015

Second DG CLIMA public consultation on NER300/NER400

DG CLIMA has launched the second public consultation in a year explicitly asking about NER300. In the table below, the questions it asks are compared with the earlier consultation, which closed on 31 July 2014. The deadline for responses is 16 March 2014.

Latest consultation: Consultation on revision of the EU Emission Trading System (EU ETS) Directive
— closing 16/03/2015
Earlier consultation: Consultation on Emission Trading System (ETS) post-2020 carbon leakage provisions
— closed 31/07/2014
  • Do you see reasons to modify the existing modalities applied in the first two calls of the NER300? Are there any modalities governing the NER 300 programme which could be simplified in the design of the innovation fund? If you see the need for changes, please be specific what aspects you would like to see changed and why.
  • Do you consider that for the extended scope of supporting low-carbon innovation in industrial sectors the modalities should be the same as for CCS and innovative renewable energy technologies or is certain tailoring needed, e.g. pre-defined amounts, specific selection criteria? If possible, please provide specific examples of tailored modalities.
  • Are there any complementary aspects regarding innovation funding you would like to add to the replies given to the previous written consultation in the light of the European Council conclusions?
  • Currently the European Commission implements the NER300 programme to provide from EU ETS specific support for large-scale demonstration of Carbon Capture Storage (CCS) projects and innovative renewable energy. 300 million allowances, representing ca. 2% of total phase 3 allowances, are dedicated for this purpose. What share of the post-2020 allowance budget should be dedicated to such innovation support?
  • At the moment, EU ETS rules do not contain a specific support scheme for industrial innovation and deployment of new low-carbon technologies (apart from support for CCS and renewables under the NER300). Do you think there should be such a financial support scheme?
  • If innovative low carbon technologies in the industry are to be further supported, which could be possible sources of funding?

The reponses to the earlier consultation, which were analysed by NER300.com have now been analysed by the EC. The NER300.com article has been updated with a link to the EC’s official summary of the responses.

Nov 27 2014

Analysis of inputs to public consultation on future of NER300

***UPDATE 9 Jan 2015: The EC’s official summary of the public consultation responses is now available here. NER300.com’s comments on this summary appear at the bottom of this article.***


On July 31 2014 a public consultation closed on ‘Emission Trading System (ETS) post-2020 carbon leakage provisions’. The consultation included the question, “Currently the European Commission implements the NER300 programme to provide from EU ETS specific support for large-scale demonstration of Carbon Capture Storage (CCS) projects and innovative renewable energy. 300 million allowances, representing ca. 2% of total phase 3 allowances, are dedicated for this purpose. What share of the post-2020 allowance budget should be dedicated to such innovation support?” with an invitation to respondents to explain their answer.

Respondents were asked to indicate whether they would allow their replies to be made public. These replies have been posted on the homepage of the public consultation. An analysis of them is given below.

Freshest thinking

The NGO Change Partnership offered advice on how the pot of a new NER300-type scheme could be filled with allowances: “The allowances should come from a combination of a ‘haircut’ on the Market Stability Reserve (MSR) together with a dedicated fund of allowances. This should replace any ‘New Entrants Reserve’. Importantly, allowances should not be monetised but used as collateral to leverage additional funding.” The MSR is a measure that would be applied to Europe’s Emissions Trading Scheme to adjust the amount of carbon allowances that are in the market, with the expected effect (at least in the near term) of boosting the carbon price. It could begin in the next 2 to 7 years, depending on the will of the Council and European Parliament. The mandate to launch additional calls under NER300 rules, or to start NER400 early, could be linked to this dossier.

Alstom, which has been involved in a number of awarded and un-awarded NER300 proposals, fleshed out Change Partnership’s ideas:

[…] We fully support the continuation of the NER300 beyond 2015 and before 2020. To be meaningful and credible, the Fund should make available a very large amount of money.

  • From the ETS: free allowances from the NER non-allocated in 2020, free allowances allocated to plants that will close before 2020 (IED regulation) and EUAs from the Market Stability Reserve could be monetised. Without being monetised, EUAs could also be used as collateral to leverage financing at an agreed carbon price.
  • From the 2014-2020 EU budget: ‘Smart or Inclusive Growth’ or ‘Sustainable growth: Natural Resources’ lines, European Structural and Investment Funds, Research Fund for Coal and Steel, Horizon 2020, Connecting Europe Facility and the tax on financial transactions.[…]

The need to look beyond NER300 for stimulating innovation in energy technology was a theme in a large number of responses. Only one respondent, Holcim, mentioned “risk-sharing” in its submission, of which the EUAs-as-collateral approach could be one example.

Veterans’ responses

Industry

The ‘veterans’ in this context are companies that had already applied for NER300 funding. Alstom, above, was one. Air Liquide described NER300 as Europe’s “only tool for funding large scale demonstration European projects” (supported by the European Industrial Gases Association). The utilities ENEL (responding via its Slovakian subsidiary) and RWE recognised the value of support for innovation in energy technology, but could not accept that distorting the Emissions Trading Scheme in the way NER300 has done is a price worth paying. This was a widely held view. ENEL wanted to see “analysis of [NER300’s] effectiveness and achievements”, which two other organisations, BDI and the Swedish Forest Industries Federation, also called for. Shell parted company from other oil companies and their associations by expressing its “full support” for NER300 and calling for any follow-up to be better resourced. Finally, Magnesitas Navarras, whose technological approach was confirmed ineligible by the EC in its answer to FAQ 29, looked on the bright side: “We are going to present the project in the topic LCE 15 under Horizon 2020.”

Associations

Companies that have tasted NER300 like it. That feeling is shared by their industrial associations. The two European renewable energy industry associations that responded, Ocean Energy Europe and EWEA, praised NER300. The CCS Association said NER300 had had “limited success” in promoting CCS and that a better funded future programme “should focus on delivering large-scale deployment of CCS in the EU post-2020.”

Member States

Estonia considered NER300 “an important funding programme for innovative carbon projects which helps to reduce greenhouse gas emissions and [which] should definitely continue after 2020.” The UK, whose three projects were between them awarded one sixth of the NER300 pot (more than any other Member State), would like any future pot of money for low carbon innovation not to be created by raiding allowances from the Emissions Trading Scheme. Poland shared this view, adding that if a new scheme were created the focus should move from CCS to technologies for cleaner combustion of fossil fuels. Regions also gave input. Wallonia and Flanders insisted on the principle of geographical balance. Bavaria, Thüringen and Vienna, which were the only other local government administrations to give a public reply, dismissed CCS.

NER300 newbies

The ‘newbies’ in this context are organisations from which nothing or little on NER300 has so far been heard or that have had no direct connection to the instrument. They include, above all, industrial sectors at risk of shifting production outside Europe if the EU puts too high a cost on carbon dioxide emissions. The EC intends these sectors to benefit from NER300-type funding in future.

To a great extent, however, the companies concerned and the associations that represent them reject the idea that they should give up any allowances that would otherwise be given to them for free. The taking of allowances that would otherwise have been freely allocated to new entrants was the way in which the original NER300 pot was formed. Solvay said, “The ETS is an instrument that must curb emissions at the lowest costs for participants,” echoed by Ineos, a manufacturer of oils and olefins: “The Commission should prioritise protection for industries at risk of carbon leakage to allow EU companies to remain competitive.”

One drawback noted by many of basing the pot size on a number of allowances is that the amount of money it ultimately contains will depend on an unknown quantity: the price at which the allowances are monetised. Eurometaux, repeated by 10 metal producers or their associations, pointed out that the availability of NER300 funding will be inversely proportional to the need for it: when carbon prices are high, this on its own can suffice as the driver of innovation, yet the NER300 pot will be huge. When they are low, the carbon price will not be sufficient, but the pot, if linked to it, will also be too small. USG proposed to deal with very large pots apparently by demanding more technical risk in projects: “The higher the carbon price is targeted to be, the higher the benchmark level should be.”

Support is stronger for the idea of linking the revenues from auctioned allowances to spending on low carbon innovation because this would not reduce the number of allowance available for free allocation. But can Member States be trusted to spend the revenues on ambitious technology programmes? The chemical industry lobbies CEFIC and VNCI think not. They both write, “It is seen as unlikely that Member States will free resources from auctioning revenues due to national budgetary challenges.”

A number of purists responded, opposing any use of the ETS to fund technology programmes and insisting that general taxation be the source of funding instead. This fully insulates the size (and therefore design) of the programme from the vagaries of the carbon market.

Recommendations

Broader

Many, from a variety of sectors, called for the future NER300 to be broader in scope:

In which direction should NER300 be broadened? The NGOs can perhaps provide a disinterested view

Energy efficiency in industry

Energy efficiency in buildings

Energy efficiency in fossil fuel combustion

General energy efficiency

Facilitate cross-border projects

EON & German Association of Energy and Water Industries

Calls every two years from now on

Bellona Europa

No returning of money in case of project failure

Swedish Steel Producers´ Association says NER300 payouts should not be reduced or cancelled if the project is built but ultimately does not perform, which is a feature of current NER300 rules that the cement industry (CEMBUREAU + 18) also considers to be a drawback.

Greater share of costs should be covered by EC?

Bellona Europa says, somewhat contradictorily, that “a higher share [should be] covered by the EC,” but also “any projects should require a substantial financial or in-kind commitment from industry”. Humberto Delgado Rosa (Director responsible for NER300 in DG CLIMA) speaking at The EU Energy Challenge said that the rules on NER400 were far from being decided and that an increase in the proportion of costs covered could be considered. He is unlikely to go as far as one respondent’s wishes: ‘Marek Kucharski Bełchatów’, writing as a citizen but using an email address of Polish electricity company PGE said grants of 100% of costs should be allowed for CCS. PGE had made the same statement at the SET Plan conference in Warsaw 2011.

CPUP

The International Association of Oil & Gas Producers and its member Total made an interesting point about CPUP. CPUP was based around the wrong metric for CCS plants: “The criterion should not be the extra cost per tonne of stored CO2, but rather the extra cost per kWh of electricity.”

“It’s the regulatory framework, stupid”

The paper industry (CEPI + five) said that success in energy innovation “is not so much a matter of budget allocated, but of policy uncertainty.” They were joined by three other Nordic associations/companies. The Swedish Forest Industries Federation wrote, “some of the [NER300 projects] have not been made. This is not due to the amount of allowances used for NER300 but to the low credibility of the European energy and climate policy. To increase the amount of NER300 allowances will not change this. A clear, transparent and stringent policy would mean much more.”

Avoid RES/CCS competition within the programme

Eurogas: “The direct competition with renewables under NER300 should be reduced and additional funding instruments for low-carbon investments be considered.”

Complexity

Many said NER300 should be made less complex, but without saying how.

Attitudes to CCS

The question of whether CCS is a valuable technology divided opinion as follows. The summary neglects the small number of replies declared to be personal responses.

Pro-CCS Anti-CCS
  • Eurometaux + 10 “Financing of CCS should not be a priority for the allowance budget.” But ERAMET is more conciliatory: “CCS can be a useful tool to decarbonise the power sector and also the industry.”
  • Regional public authorities as mentioned above
  • Central Europe Energy Partners (mentioned above) and Poland prefer efficiency in fossil fuel combustion
  • Danish Ecological Council
  • European Salt Producers’ Association
  • European Ceramic Industry Association + 55 companies and national associations representing the ceramics sector: “the Ceramic Roadmap shows that CCS will remain prohibitively expensive for some time after it is installed in other industries.” Also the Portuguese Association for Ceramics and Domestic Glass.
  • Terremilia (concerns over CO2 storage)
  • Wopfinger Baustoffindustrie
  • ver.di (German trade union)
  • Vetropack
  • Committee of PET Manufacturers in Europe (“Is CCS the correct or appropriate technology for Europe?”)
  • European Dairy Association + 2
    1. NER300.com’s comment

      Using EUAs to guarantee loans…? Why not. Change Partnership and Alstom propose a model set up and operated in a similar way to the EEEF. The selection process could be devolved entirely to the EIB or an agent and could be much lighter, for example, operated on a first-come-first-served basis. But an appetite exists also for free money. The future NER300 should continue to award a large part of its pot as cash.

      Like the respondents suggest, the rules governing the ranking of NER300 proposals make it difficult for the sponsor of a particular project to estimate his chance of success. Nonetheless, the rules do perform the difficult task of treating ‘apples and pears’ equally. If NER300 changed from a competition that pays up only upon reaching performance milestones (production of MWh or tonnes CO2 sequestered) to one where awards are paid regardless of ultimate performance, it would attract technology that is less mature. Reporting would still be mandatory and would become more onerous and similar to Horizon 2020‘s.

      In the case of a high carbon price, it would be wiser to fund more projects than to try to incentivise the building of projects using ever more speculative technology by, for example, offering ever higher awards per project. NER300 money handed out either in the conventional manner or as financial instruments is inappropriate for such technology.

      CCU, carbon capture and usage, should mostly be avoided. Many of the materials that could be made using CO2 have lifetimes that are too brief to be of any use for climate protection. Exceptions are materials that mineralise CO2, locking it into stable, long-lasting compounds. CCU is relevant to energy policy only by its application in methanation, a technique for storing energy also known as ‘power-to-gas’.

      EC’s official summary

      In view of the target of the public consultation, the EC should not be too surprised by the answers it has received. It concludes, “Many agree that the scope for future ETS-financed innovation funding should go beyond CCS to include support for low-carbon technologies in industry,” but this is to be expected if the question is being asked to sectors not currently in the programme (carbon leakage sectors). Similarly, in a survey targeting industry, it is to be expected that the part of the innovation chain area where it is seen as “most important” to “strength EU innovation support” should be “large-scale pilot [plants]”.

      “Some underlined that these funds could be used to ensure cheaper loans for industry,” writes the EC. Only two public responses mentioned this (see Freshest Thinking, above), but because it’s an interesting idea, it gets a mention.