EU pushes back deadlines 2 years in green energy funding scheme

Reuters News
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Posted: Oct 15, 2014 11:04 AM

By Michael Szabo

LONDON (Reuters) - European government officials have approved a proposal to delay deadlines for final investment decisions and the operational launch of Europe's first commercial-scale carbon capture and storage plant and 40 renewable energy projects.

The measure, proposed by the European Commission following pressure from seven EU member states including Britain, France and Germany, throws a lifeline to some projects struggling to comply with the EU's 2.1 billion euro ($2.7 billion) scheme to cut greenhouse gas emissions.

The recipients under the first round of the NER300 program had been due to make their final investment decisions by the end of 2014 and be operational by the end of 2016, but seven EU nations asked the Commission to delay all deadlines by two years.

Projects awarded funding in the second round announced in July now have until 2018 for final investment decisions and 2020 for activation.

The delays mean the viability of some of the first projects awarded cash will not be known for another two years, and those on the NER300's waiting list are now less likely to get funding.

British utility Drax was awarded 300 million euros in the program's second round to help it develop technology to capture 1.8 million tonnes of carbon emissions annually from a coal-fired power plant in northern England and bury them in a depleted gas field in the North Sea.

Forty renewable energy projects across 20 EU countries were awarded grants worth around 1.8 billion euros.

Developers of several projects have since said they are unable to move forward for various reasons, offering to hand back the cash.

Funds for the NER300 were raised through the sale of 300 million carbon allowances under the EU's Emissions Trading System between 2011 and 2014, a reserve of permits set aside for new entrants in the bloc's carbon market.

(editing by Jane Baird)