May 26 2016

ETS Innovation Fund discussion at Carbon Market Watch report launch

MEPs Jo Leinen and Gerben-Jan Gerbrandy yesterday co-hosted the launch of Carbon Market Watch’s report ‘The Final Frontier — Decarbonising Europe’s energy intensive industries‘ in the European Parliament. Carbon Market Watch says its “findings highlight that claims by polluters that their industrial sectors cannot be decarbonised — often used as means to justify special treatment — are grossly unsubstantiated”. Femke de Jong, EU Policy Director at Carbon Market Watch, put up this slide comparing the quantity of freely-allocated allowances to industry with the amount to be targeted on innovation, but stopped short of repeating her organisation’s call for an ‘NER1000’ made in October 2015:

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MEP Fredrick Federley’s proposal to increase the size of the Innovation Fund from 450 M allowances to 600 appeared to have CEFIC‘s explicit support. William Garcia, Executive Director for Energy, Climate and HSSE at CEFIC said, “The larger the fund is the better. 400 M EUAs is a very good start but maybe not enough”.

Federley said, “If we create an Innovation Fund, it’s important to know that the funding is being used. We know from NER300 there’s a lot of money not being used.”

He took a hypothetical example to defend his line that location should not be a consideration in the selection of projects for funding or financing: “If an industry in Portugal comes up with the best ideas to decarbonise then that is where the Innovation Fund’s means should be used. Theoretically this could happen and we should not stop that process.” However, he expects that Council will “endorse [the EC’s proposal for geographical balance] because every government wants to go home feeling it has secured so-and-so millions of euros of investment in its country”.

Gerben-Jan Gerbrandy, responding to a question by IOGP, said, “I’ve always supported the development of CCS technology but I’ve always foreseen that it shouldn’t be the oil and gas companies that are going to use that technology. I think we have to focus on process CO2 because there the biggest difficulties lie.”