* Commission aims to award next round within 12 months
* No date for sale of 100 mln remaining carbon allowances
* IEA says that without CCS, coal faces climate backlash
* 1.2 billion euros awarded to renewable energy projects
(Adds details, background, IEA, CCS professor comments)
By Karolin Schaps and Barbara Lewis
BRUSSELS, Dec 18 The first round of a European
Commission contest to fund carbon capture and storage (CCS)
projects failed to find a winner, the EU's executive said on
Tuesday, deepening doubts the technology can emerge soon to help
CCS developers will be able to re-submit bids for a second
round, which Environment Commissioner Connie Hedegaard said
should be concluded within a year.
"Within 12 months we will be able to award the second round.
We would like to make a very fast second call, as fast as
possible," she told a news conference.
None of the short-listed projects for CCS, which entails
trapping and burying carbon emissions from fossil fuel plants,
made it to the final selection because of funding gaps or
because projects did not advance enough to meet Commission
EU member governments had to confirm to the Commission they
could fund 50 percent of the proposed projects.
Steelmaker ArcelorMittal withdrew its application
for a French project, citing technical problems.
"This is a slap in the face for EU climate policy," Stuart
Haszeldine, professor of CCS at Edinburgh University, said.
The Commission has sold 200 million carbon allowances for
1.5 billion euros, of which it set aside 275 million euros for
CCS projects. This sum which will be carried over to the next
bidding round, when some revenues from the sale of a further 100
million allowances will be assigned.
The allowances, which trade on the EU Emissions Trading
Scheme, each provide the right to emit 1 tonne of carbon
Hedegaard said on Tuesday she would not speculate on a date
for auctioning remaining allowances, saying it would be a
CCS is commercially unproven and expensive to build, but
governments that seek to curb emissions from the
carbon-intensive power industry want it to make a contribution
The International Energy Agency expects coal to come close
to surpassing oil as the world's top energy source by 2017, it
said on Tuesday, painting a gloomy picture for the fight against
"Without progress in CCS, and if other countries cannot
replicate the U.S. experience and reduce coal demand, coal faces
the risk of a potential climate policy backlash," said Maria van
der Hoeven, the IEA's executive director, adding she did not
expect CCS to play a role by 2017.
The Commission announcement had been expected after reports
that there would be no EU funding for CCS projects in any
country, including Britain, which had four projects on the
Commission's shortlist published in July.
RENEWABLE ENERGY PROJECTS
The Commission allocated 1.2 billion euros to 23 renewable
energy projects on Tuesday, with a Dutch biomass refinery
project pocketing the largest amount of nearly 200 million
Other successful projects included solar power, wind and
ocean energy. In total, the projects are expected to create
around 1,000 permanent jobs for 15 to 20 years.
Two years ago the Commission's planned sale of 300 million
2013-vintage EUAs, dubbed the NER 300, was expected to raise
around 4.5 billion euros, but a steep drop in the price of
carbon significantly reduced proceeds from the first tranche of
200 EUAs to 1.5 billion euros.
Funds allocated to renewables under the programme are meant
to cover additional costs incurred by new technologies in
comparison with proven projects, while private sector and
national funding will help finance the remainder.
The Commission expects the funding to generate about 2
billion euros of private investments on the selected projects.
($1 = 0.7598 euros)
(Editing by Adrian Croft and Jane Baird)