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ENVIRONMENT: Europeans Pay Companies to Pollute More

David Cronin

BRUSSELS, Dec 11 2009 (IPS) - Some of the world’s most polluting companies are receiving financial support from the European taxpayer to promote the continued use of the fuels that cause global warming, according to a new report.

In 2005, the European Commission, the executive arm of the EU, set up a group known as the Zero Emissions Platform (ZEP) to advise it on the possibility of capturing carbon dioxide from coal-fired power plants and burying it underground. Dominated by large energy firms, ZEP has secured 1.5 billion euros (2.2 billion dollars) in public subsidies and is busily lobbying for support from policy makers at the international climate change talks now under way in Copenhagen.

Corporate Europe Observatory (CEO), an organisation which monitors the influence of big business on the EU’s institutions, deems it inappropriate that such vast sums are being allocated to carbon capture and storage (CCS) projects when the technology they employ has not yet proven to be environmentally benign.

In a report titled ‘Public funds used to lobby for fossil fuels in Copenhagen’, CEO notes that the proponents of carbon storage admit that it will not be ready for use before 2020. As a result, it will not help realise the EU’s objective of reducing by 20 percent its greenhouse gas emissions by the end of the next decade.

Yet while the technology it is extolling is still in its infancy, ZEP is holding an event in the Danish capital this weekend to urge that carbon storage should be eligible for funding under the United Nations’ clean development mechanism. This mechanism allows industrialised countries to invest in low- polluting projects in poorer nations as an alternative to cutting their own emissions of greenhouse gases.

ZEP’s 23 members mainly represent major energy companies including Shell, BP, Vattenfall, E.ON, Alstom, Siemens and Statoil. Some of these companies have a hugely controversial environmental record; Shell’s gas-flaring activities in the Niger Delta, for example, are the biggest single source of carbon dioxide emissions in Africa. By contrast, the World Wide Fund for Nature (WWF) is the only well-known environmental group involved in ZEP.

Yiorgos Vassalos, a CEO campaigner, said: “The fossil fuel industry has used public money to push the case for carbon capture and storage within the EU – and now, they are in Copenhagen to argue for more of the same. Giving CCS credits under the clean development mechanism will provide another source of subsidy – and legitimise the expansion of fossil fuel projects in the developing world.”

He argued that the EU appeared more eager to devote public finances to carbon storage than to renewable energy, even though wind and solar power are among the cleanest forms of energy generation available.

Hans van der Loo, head of Shell’s EU affairs office, denied that ZEP is trying to win support for fossil fuels at the expense of renewables. Carbon storage should be part of a multi-pronged approach to tackling climate change, that will also incorporate energy efficiency and increased use of renewable energy, he said. “CCS is not a silver bullet,” he added. “It will not save the world. But without it the world will not be saved.”

Sanjeev Kumar, WWF representative on the platform, said the body provides a “good snapshot” of what different interest groups think. Yet he agreed that the dominance of private sector representatives in ZEP and other such bodies was an example of how “there are far too many doors open to industry” in the Brussels bureaucracy.

Carbon storage projects have benefited considerably from a “recovery plan” approved by the EU in response to the financial crisis. About 1 billion euros has been made available to the technology as part of that blueprint, while over 400 million euros has been provided from the Union’s scientific research funds.

Eight of the firms belonging to ZEP have received EU research funding. These are Shell, BP, Alstom, RWE, Siemens, Total, Air Liquide and Vattenfall. Both Vattenfall and Alstom run the Union’s first demonstration project for carbon storage at Schwarze Pumpe in Germany.

The European Commission has calculated that 13 billion euros will be needed for the development of carbon storage techniques over the coming decade. Because this technology can draw money from the EU’s emissions trading scheme – which allows companies to buy and sell permits to pollute – and from a major investment plan to transform Europe into a “low-carbon” economy, as well as from the national budgets of EU governments, the CEO estimates that more than half of all support for carbon storage could come from the public purse.

The CEO report says there is a risk that the EU’s zealous promotion of so- called clean coal could ultimately prove ruinous for the climate, particularly if other governments are convinced to share that enthusiasm during the Copenhagen talks . The result of ZEP’s activities, said the report, could be that “precious resources for the funding of real solutions such as renewable energy, energy efficiency and reforestation will be put on the back burner, while the coffers of the fossil fuel companies historically responsible for climate change will be full of public money.”