Brussels would allow state aid for carbon capture

A worker poses for media at a truck before the first official run of the mini plant ''Schwarze Pumpe'' in Spremberg, September 9, 2008. Vattenfall's CO2-free power plant is a pilot project for carbon capture and storage (CCS) - the first power plant in the world that will take the toxic emissions from coal and bury them deep in the ground.

BERLIN (Reuters) - Brussels would look favorably at member states giving financial support for plants to test almost carbon-free power production, which could help fight climate change, a European Commission official said on Monday.

German utilities are among those worldwide that are seeking to pilot carbon capture and storage (CCS), which supporters hope can clean up the burning of coal for power generation by separating off carbon dioxide (CO2) emissions and burying them.

"CCS is identified as potentially making a substantial contribution to CO2 reductions," said Piotr Tulej, head of the energy and environment unit at the EC's energy directorate.

He told reporters during an energy conference in Germany that state aid prohibitions that usually apply would not be enforced, but "really it is in the hand of member states."

The latest two German projects, one by Swedish energy company Vattenfall Europe's German unit and another by utility RWE, were very welcome, he added.

Vattenfall last week opened a small 30 megawatts (MW) pilot plant in eastern Germany and RWE said last month it selected the town of Huerth for a commercial-size 450 MW CCS plant, which it hopes will become operational by 2014.

RWE has said it wants private partners or the public sector to shoulder half of the cost of the 2 billion euros ($2.80 billion) project. It has already raised 1 billion euros for that.

Poland, Britain and the Netherlands are among other EU countries working on the technology.

Skeptics say CCS is years away from commercial maturity and many environmentalists argue it distracts from the need to move from fossil fuels to renewable energy sources.

(Reporting by Vera Eckert, editing by Anthony Barker)