Nine firms mull Rotterdam CO2 capture project

AMSTERDAM, July 14 (Reuters) - Nine energy firms including utility E.ON EONG.DE and oil major Shell (RDSa.L) are considering funding a large chunk of a proposed carbon capture project in Rotterdam, the project's initiator said on Tuesday.

Rotterdam Climate Initiative (RCI), a platform for local authorities, groups and companies to work together to fight climate change, aims to halve CO2 emissions in the area by 2025 compared to 1990 levels, partly by carbon capture and storage (CCS).

"We have signed letters of cooperation with nine companies, who are willing to work with us to investigate what the costs are for them to build capture installations," said Wiert-Jan de Raaf, programme director at RCI.

RCI estimated that at least 1 billion euros of funding would be required from the Dutch government and the European Union but the remaining 2 billion euros would have to come from industry.

He said the firms looking into costs also included Belgian electricity company Electrabel, as well as industrial gases groups Air Liquide (AIRP.PA) and Air Products (APD.N) and Spanish energy and engineering group Abengoa (ABG.MC).

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.

But it has never been tested on a commercial scale and is opposed by some environmentalists who argue the technology is unsafe, will not be ready in time and could divert investment away from truly green sources of power.

RCI aims to store 5 million tonnes of CO2 per year by 2015, which it hopes to increase to 20 million tonnes a year by 2025.

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 meet its ambitious emissions cuts targets.

Companies including Dutch state pipeline operator Gasunie are also working with Rotterdam's port authority to develop pipeline infrastructure and storage facilities, De Raaf said. ($1=.7149 Euro) (Reporting by Catherine Hornby, Editing by Michael Kahn)