EU surmounts carbon capture impasse

European Union member states have come to agreement on the division of spoils in the bloc's plan to launch a controversial technology to bury carbon underground or under the sea bed.

In 2008, EU countries backed a proposal from the European Parliament on how to support the development of carbon capture and storage (CCS) that would see the sale of 300 million carbon permits through the emissions trading scheme funding a dozen pilot projects around the union.

CCS is a controversial technology whose boosters say it is the only realistic way to significantly reduce emissions from power plants - particularly very dirty coal-fired ones - and heavy industry.

Critics meanwhile describe it as an expensive, energy inefficient distraction from renewable energy and efficiency measures that will not be commercially viable before 2030, long after developed nations' greenhouse gas emissions are supposed to have peaked.

But the months-long divide within the bloc however centred on who would get to hand out the funds from the sale of the carbon permits - estimated to amount to around €3.8 billion at current depressed market prices for a tonne of carbon.

In the end, on Tuesday it was decided that it is to be the European Investment Bank that will take care of the distribution of funds, although some member states would have preferred that it be their own treasuries that took the final decision on the divvying up of the cash.

Countries also agreed to drop a requirement for matching funds from national revenues. A certain undecided minority proportion of the funds will also be delivered to innovative renewable energy technologies.

The pact must be approved by the EU parliament, which, with the initial proposal for CCS funding coming from the chamber, it is likely to do.

However, some environmentalists are steadfastly opposed to the technology, calling it a subsidy for the coal industry dressed up as a climate solution.

The Greens in the European Parliament decried the final agreement.

The agreement "would see public funds ...pumped into coal-fired power plants at the expense of renewable energy," warned Luxembourg MEP Claude Turmes. "Unproven Carbon Capture and Storage is set for another big pay day."

"The EU will never achieve the necessary reduction in greenhouse gas emissions by 2020 if it continues to support outdated, dirty fossil fuels."