BELGIUM: October 10, 2008


BRUSSELS - The European Union must urgently find funding for a new technology to trap and bury carbon dioxide underground and should increase the region's capacity for liquefied gas shipments, the EU's French presidency said.


The proposals would form part of an EU drive to tackle climate change and secure reliable supplies of energy, something which has soared to the top of the EU's agenda after Moscow's invasion of key gas transit country Georgia in August.

The 27-nation bloc should also find ways of freeing up spare gas supplies so member states can help each other out if their neighbours suffer energy crises, said a draft document prepared for Friday's meeting of energy ministers and seen by Reuters.

In a surprise move this week, EU lawmakers backed about 10 billion euros (US$13.7 billion) of aid to test carbon capture and storage (CCS) technology, fitted to coal plants, which many scientists regard as a climate-change silver bullet.

But funding must now get approval from member states, some of which are expected to oppose the move so more funds can be used to help east European nations rebuild their highly polluting communist-era coal plants.

But France said CCS was useful not just for curbing greenhouse gas emissions blamed for global warming, but also for making more domestic energy sources available to use in the EU.

Legislation to pave the way for the CCS will have to be implemented as soon as possible, it added.

"The Council and the Commission are invited to identify the financing, in addition to private sector investment, which will be necessary for the 12 demonstrations to be put in place in 2015," said the document.

It said shipments of liquefied natural gas (LNG) could also be used to increase the range of energy sources available to Europe, provided enough import terminals were built, backed by a wide distribution network.

"The current situation as regards infrastructure is unsatisfactory, particularly in the north of Europe," it said. "That issue should also be examined closely."

And it called on EU nations to look at how they could help each other get through energy droughts by finding ways to free up spare gas supplies.

"It would be useful to put a mechanism in place whereby each member state would lay down security margins enabling it, in an emergency, to free up a certain percentage of its peak consumption, whether by drawing on stocks, increasing production or imports, or reducing consumption," it said. (Reporting by Pete Harrison; editing by James Jukwey)


REUTERS NEWS SERVICE