Dutch government plans subsidy for CO2 storage at sea

AMSTERDAM (Reuters) - The Dutch government will provide subsidies of up to 150 million euros ($190.5 million) in the next 10 years for a carbon dioxide (CO2) capture and storage project (CCS) at sea, it said on Wednesday.

The project, involving German utility E.ON and Belgian energy company Electrabel, aims to capture CO2 from an E.ON coal plant in Rotterdam and transport it 20 km by pipeline for storage in depleted gas fields under the North Sea.

The Dutch government subsidy will be in addition to a contribution of up to 180 million euros to the pilot project from the European Economic Recovery Plan, the Dutch Economy Ministry said in a statement.

"Storage projects contribute directly to reducing CO2 emissions," the ministry said. "CCS is an important link in the transition toward a sustainable energy solution."

It added that speeding up CCS development in the Netherlands would give Dutch technology suppliers a head-start in developing CCS know-how and experience.

CCS, which works by burying CO2 deep underground, is seen by industry and some lawmakers as the most vital technology in the climate change fight because it could potentially curb emissions from coal and other fossil fuel plants.

It is opposed by some environmentalists who argue it is unsafe, will not be ready in time and could divert investment away from truly green sources of power.

Home to Europe's biggest port, a major hub for oil, coal and biofuels, the Rotterdam area produces about 16 percent of the Netherlands' total CO2 emissions, and is counting on carbon capture to help it halve emissions in the area by 2025 compared to 1990 levels.

(Reporting by Catherine Hornby; editing by James Jukwey)