BELGIUM/UK: October 10, 2008


BRUSSELS/LONDON - The European Union must fund a new technology to clean up coal plants and fight the twin problems of energy security and climate change, the EU's French presidency and Britain's new climate minister say.


Safeguarding the 27-nation bloc's energy supply has gone to the top of the EU's agenda after Russia's invasion of Georgia, an important gas transit country, in August.

That goal has threatened to overtake another EU priority, climate change, given that the world's cheapest and most available energy source, coal, emits the most carbon.

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, which scrubs coal plant emissions. Many scientists regard this as the single most important climate fix.

That backing must now get approval from member states, some of which want the funds to help east European nations replace their communist-era coal plants.

But France underlined the importance of both curbing carbon emissions as well as supplying cheap electricity -- a link that CCS could provide -- in a draft document prepared for a meeting on Friday of EU energy ministers, seen by Reuters.

"The (EU) 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, referring to EU goals to support commercial-scale pilots of the technology.

Last week the British government formally linked the dual issues of climate change and energy, creating a new ministry called the Department of Energy and Climate Change, and whose minister, Ed Miliband, backed the CCS call.

"We need to push forward on carbon capture and storage," he said on Thursday. "This will help us use the energy resources we have, increasing our energy security, while working towards our goals of reducing carbon emissions."

"The current economic difficulties make these issues more important, not less. That's why I'm arguing in Europe that we should cut the VAT on energy efficient products," he added.

CCS is an untested technology which would fit to coal plants to capture their carbon dioxide emissions and pipe them for permanent storage underground. It has several problems including adding half again to the capital cost of a power plant and making a serious dent in efficiency.

The EU should also find ways of freeing up spare gas supplies so states can help each other out if their neighbours suffer energy crises, the energy meeting document said.

It said shipments of liquefied natural gas (LNG) could 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." (Reporting by Pete Harrison and Gerard Wynn; editing by Anthony Barker)


REUTERS NEWS SERVICE