Karen Frantz
GHG Monitor
11/22/13
A funding program for carbon capture and storage and other low-carbon demonstration projects has kicked off its second phase, with the European Investment Bank confirming it has started selling 100 million remaining EU emission allowances, according to Point Carbon. The EIB said last month it expected to soon resume the sales of the allowances, after the first phase completed in September 2012 and raised more than €1.5 billion for various projects. But it is unclear how much of a chance CCS projects will have in this second round. Only one CCS project was selected as a winner in the first round, and that project—a “green” steelmaking pilot in France—was withdrawn at the last minute due to unspecified “technical difficulties.” Although Climate Action Commissioner Connie Hedegaard said last year that CCS projects may have more of a chance in the second phase, some experts expressed skepticism.
The NER 300 program sells emission allowances “from the new entrants’ reserve set up for the third phase of the EU emissions trading system,” according to the European Commission. The EIB said the program will “be carried out in a manner to minimize any impact on the market,” and that the sales of the remaining allowances “is envisaged to take place over a five month period, depending on liquidity, with an expected average sales volume of 20 million EU Allowances per month.” “All of the remaining 100 million EU Allowances will be sold as futures on the two exchanges used for the first round,” the EIB said in a statement. “All remaining EU Allowances will be placed on the two exchanges and no dedicated NER300 auctions are anticipated on either exchange.”
The EIB said the award funding for the second round of winning projects is still on track to be decided in mid-2014. Money for the awards will be supplied through the current allowance sales and the rollover of €275 million that had initially been set aside for the withdrawn French steelmaking pilot in the first phase.
