HomeRegional NewsInternationalEU launches green technology race

EU launches green technology race

EU headquarters
in Brussels
Brussels, Belgium — ESI-AFRICA — 10 November 2010 – The European Union (EU) has launched a competition for about US$5.6 billion (R38.6 billion) of funding to help companies compete in the green technology race against China, Japan and the United States.

Announcing this here, the EU said all eligible projects should be up and running by 2015. Big winners were likely to include power generators such as Germany’s E.ON and engineers like Alstom of France.

“These and other green technologies are an increasingly important source of future economic growth and jobs,” EU climate chief Connie Hedegaard said in a statement here.

“The funding will go to at least eight carbon capture and storage (CCS) projects and at least 34 renewable projects,” the statement said. “The funds will be found from an obscure corner of the EU’s Emissions Trading Scheme (ETS) “’ its main tool for curbing CO2 emissions, which forces companies to buy a permit for each tonne of carbon they emit,” it added.

“A total of 300 million carbon emissions permits from a reserve fund of the ETS will be transferred to the European Investment Bank (EIB), which will convert them to cash before distributing them to the chosen projects,” the statement explained.

Their value is about 4.3 billion Euro’s (R40.8 billion) at the current carbon price, but could rise or fall with the market. The Commission estimates that with contributions from EU governments and the companies themselves, this could rise to 9 billion Euro’s (R85.5 billion) of investment.

It is expected that all these credits will be sold before the start of the third trading period of the ETS in January 2013, the Commission said. At least one demonstration pilot project will be awarded per EU member state, and no more than three will be approved in a single country.

The European Investment Bank (EIB) and the European Commission will assess the proposals, consulting EU governments before making the final decision in 2012.