E3G

Media Brief: New EU Climate Change Package Fails to Tame King Coal

By Nick Mabey

Background: Tackling Coal is the Critical Task for the EU

Over the next 25 years the EU will build up to 850 Gigawatts (GW) of new power stations, more than the USA and nearly as many as China. Even if the EU meets its renewable energy targets, around 70% of this investment will be in coal or gas fired power stations [Figures from International Energy Agency (2006) and Euroelectric (2007)].

With gas prices high, and fears about dependence on Russian supplies rising, investment in coal is increasing - nearly 40GW of new coal power stations are planned by 2012 alone, mainly in Germany, Poland and Eastern Europe [RWE analysis 2007].

Any fossil power plants built after 2010 will still be in operation in 2050, the date by which the EU plans to have reduced its total GHG emissions by 60-80%. Unless these plants can become effectively carbon neutral by applying carbon capture and storage technology (CCS) there is no chance of the EU hitting its overall climate change objectives without scrapping a whole generation of infrastructure worth hundreds of billions of Euros.

However, the climate change package fails to deliver strong enough incentives to avoid a lock-in to dirty investment, and will not drive the development of carbon capture and storage and other clean energy technologies. Estimates of future carbon prices in the ETS are not high or certain enough to drive deployment of CCS, even after 2020, and, as with renewable energy technologies, a mandatory approach is needed to give effective market incentives for private investors to move forward risky technologies.

As the European Commission itself recognises, “the target of halving 1990 global GHG emissions by 2050 will never be met unless the energy potential of coal can be exploited without ballooning emissions.”

Without Europe leading on developing these technologies the USA, China and India will carry on investing in dirty coal - removing any possibility of limiting climate change to 2°C.