EU Carbon Storage Plan

Within the European Commission's comprehensive package of legislative proposals on climate change and energy announced on Wednesday (23 January) is a plan to promote the development of a controversial carbon emissions mitigation technology known as "carbon capture and storage" (CCS).
CCS "captures" carbon dioxide from power plants and stores it in underground geological formations or deep oceans instead of releasing it into the atmosphere.
The climate and energy package includes a series of revised guidelines on state aid for environmental protection that will enable member state governments to support CCS demonstration plants.
"The new environmental aid guidelines strike the right balance between generous support mechanisms for well-targeted aid supporting the environment and the preservation of competition," said competition commissioner Neelie Kroes at the press conference on Wednesday announcing the "Climate Action" package.
Additionally, under the proposals, carbon dioxide captured and stored will be considered not emitted under the emissions trading system (ETS).
The revision on state aid guidelines is necessary because in the first phases of the technology's development, CCS demonstration projects will require additional finance beyond the incentives from the ETS carbon market, as the current cost of the technology is much higher than the price of carbon.
"CCS will only be deployed if the cost per tonne of CO2 avoided is lower than the carbon price," says the commission.
The commission says that while energy efficiency and an increased use of energy from renewable sources are the primary solutions in the short term, other options are needed in the longer term if Europe and the rest of the world are to achieve a 50% reduction in greenhouse gas emissions by 2050.