Europe's Carbon Capture Competition Fails

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland) -- Europe's efforts to lead the world in the development of carbon capture and storage (CCS) technology has all but collapsed after the last candidate for a share of a €1.5 billion ($1.85 billion) development fund dropped out of the race.

The decision by steel giant ArcelorMittal (NYSE:MT) (Luxembourg) not to press ahead with a project to capture and store carbon at the Florange steel mill in north-east France means that the European Commission's (E.C.'s) New Entrants Reserve 300 (NER300) funding programme has no applicants left to share a €1.5 billion fund. Three of the U.K.'s leading CCS projects, planned for power stations, also had to withdraw from the competition in recent weeks following the failure of the U.K. government to commit to matching any potential NER300 funding.

ArcelorMittal claimed it has now withdrawn the Florange location from the NER300 funding race over 'technical difficulties', but denied that it is ditching the Ulcos initiative.

"[This] is perfectly coherent with what is in the agreement signed with the French government," the company claimed. "This in no way means the Ulcos project is being abandoned."

Florange was to be the location of a project to retrofit post-combustion CO2 capture technology to the furnaces. The Ultra--Low Carbon dioxide(CO2) Steelmaking, or Ulcos, is a CCS consortium consisting of 48 European companies and various organisations from 15 countries. The E.U. pilot project is expected to capture 0.5 million tonnes of CO2 per year, which will be transported up to 100-kilometres (km) by pipeline for storage in onshore saline formations. Recently, ArcelorMittal had said it would pump around €180 million ($235.6 million) into keeping the Florange furnaces in a good working state so that they could be used by Ulcos if the project won NER300 funding.

ArcelorMittal has been under fire from the French government ever since it announced in October that it was shutting down the two blast furnaces at Florange. However, an eleventh hour agreement between the two last week will see the plant remain open for the time being. For additional information, see October 4, 2012, article - ArcelorMittal Shuts Down Two French Blast Furnaces as European Steel Checks Priorities.

Chris Davies, a Member of the European Parliament (MEP) who was involved in creating the CCS funding mechanism claimed the decision by ArcelorMittal was "disappointing".

"Hopes of Europe becoming a world leader in the development of a key technology to combat global warming have been dashed," he claimed. "The announcement today that steelmaker ArcelorMittal will not proceed with their Ulcos project in France means that not one single new CCS scheme is set to proceed. Today's news marks a major failure by Europe to step up to the mark."

Two weeks ago, the U.K. Energy Secretary Ed Davey, confirmed the U.K.'s leading CCS projects had failed to achieve NER300 funding. "We didn't get into the first round of NER300 funding," he admitted while presenting the U.K.'s Energy Bill.

Last month the U.K. government revealed its own shortlist of large-scale CCS projects competing to win a share of its €1.2 billion ($1.6 billion) fund. For additional information, see November 2, 2012, article - U.K. Reveals 'Final Four' Carbon Capture Projects.

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