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28th Aug 2016

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Commission outlines 'clean coal' China plan

The European Commission put forward plans on Thursday (25 June) for the financing of a demonstration coal plant in China that aims to have 'near zero' emission levels through the use of carbon capture and geological storage technology (CCS).

Environment commissioner Stavros Dimas said the joint project to have a CCS-using coal plant up and running in China by 2020 could act as a template for future agreements between developed and developing countries.

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"This important co-operation between the EU and China on CCS can act as a model for co-operation under the post-2012 global climate change regime the world must agree in Copenhagen in December," he said.

In 2005 the EU and China signed a partnership agreement to co-operate on a range of climate change issues, with the two sides also signing a cooperation agreement on clean energy at the EU-China summit in Prague this May.

However the commission's new proposals, now headed to the European parliament and EU member states for approval, warn that the general role-out of CCS technology in China could be "significantly delayed" without assistance from developed countries.

One explanation for this is the greater cost of electricity production when using CCS, a process that involves capturing CO2 emissions after the coal combustion, transportation and the eventual burial of the gas underground or under the seabed.

To finance the demonstration coal plant, the commission proposes the use of a public-private partnership (PPP) - possibly in the form of an easy to set up investment fund known as a 'special purpose vehicle'.

"The initiative has to be designed to inform and garner support from China, EU and European Economic Area member states, international financial institutions and private companies to contribute to this activity," says the communication.

The commission itself has pledged several million euros for the initial stages of the plant's development, with the possibility of a further €50 million for the construction and operation phase of the project "provided there is continued political support from China".

The EU executive estimates the additional cost of constructing and operating the plant over a period of 25 years to be between €300 million and €550 million, assuming China introduces some form of carbon pricing instrument to help with the financing.

Carbon capture and geological storage

While the commission attempts to garner political and financial support for the demonstration plant, a majority of environmental NGOs consider CCS projects to be a dangerous waste of valuable funding.

Groups such as Greenpeace and Friends of the Earth argue the money should be channeled towards the development of renewable energy sources, rather than invested in a technology that will prolong fossil fuel use and may not be ready for a commercial roll out before 2030.

This, they argue, is too late if world temperatures are to rise by no more than two degrees above pre-industrial levels, a crucial cutoff point say scientists.

However supporters of CCS say it is a vital bridging technology that can help to keep emission levels down while the world is slowed weaned off fossils fuels.

In particular, the continued high growth levels forecast for China over the coming decade are expected to drive the construction of hundreds of new coal-fired electricity plants that provide 70 percent of the country's energy.

Already in 2007, the equivalent of one new 500MW coal-fired plant was being built at a rate of one every two and a half days estimates the International Energy Agency, with the country unlikely to make a rapid switch over to renewable energy.

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