EC Welcomes State Aid for Norwegian CO2 Capture Project
July 23, 2008 // Published as a news service by IHS
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The EFTA Surveillance Authority voted not to raise objections to the Norwegian government's investment in a project to test different technologies to reduce the costs and risks of large-scale carbon capture and storage (CCS).
Recent policy documents from the European Commission (EC) have highlighted the importance of these technologies for future reductions of CO2 emissions and stressed the need to have a number of European projects demonstrating these technologies on a large scale by 2015.
While CCS is expected eventually to be commercially viable, early demonstration projects are initially unlikely to generate profits for their operators. Therefore, the EC stressed the importance of public finance in providing effective assistance to such projects.
One of the first cases of active government involvement in CCS is the Mongstadt, Norway project, for which the Norwegian government notified the EFTA Surveillance Authority in 2007 that it intended to give state aid.
The EC stated that the favorable decision by the authority in July 2008 was a welcome development that should serve as encouragement for other European countries with potentially suitable CCS projects to make substantial commitments of public resources in order to further the development of CCS technologies.
So far, the U.K. is the only other European country with a government scheme for CCS of substantial character.
The EC also said that the authority's decision provided an important precedent for consideration of state aid for future CCS projects, which will be necessary to further advance technologies for the capture and underground storage of CO2 from industrial processes using fossil fuels, such as coal- and gas-fired power plants.
Source: European Commission.