The European Commission has laid down its money and taken the chance on climate change technologies in order to secure the coming energy transition by setting aside €10-billion for the new Innovation Fund.
The Commission first laid out its plan for cutting greenhouse gas emissions by 2050 last November with the heads of the national governments set to make their decisions on which direction to take later this year.
In the case that member states choose to follow the Commission's proposals, which include Europe absorbing any and all emissions that it produces, industries that use a lot of energy will be forced to make massive changes in order to adapt and survive.
Coal carbon capture technology
Coal carbon capture technology. Image: credit Peabody Energy, Inc.
The money for the Innovation Fund, given the go-ahead last week at the European Commission's Berlaymont HQ, will come from the sale of vast numbers of carbon allowances from the EU Emissions Trading Scheme and will be used for the development, testing and marketing of low-carbon technologies.
EU Commissioner for Energy and Climate Action Miguel Arias Cañete said that the strategy of creating a climate-neutral economy “will need deployment of clean innovative technologies on an industrial scale”.
“This is why we are investing in bringing to the market highly innovative technologies in energy-intensive industries, in carbon capture, storage and use, in the renewable energy sector and in energy storage,” he added.
The Innovation Fund will also soak up any money left over from the NER 300 programme following the conclusion by EU auditors that the programme had not succeeded in helping any projects reach an industrial level due to a lack of coordination and long-term planning.
Nearly half a billion of the €4-billion set aside for NER300 and the European Energy Programme for Recovery remains unspent.
Environmental groups have said that a lack of infrastructure and strategic planning remains the biggest challenges for breakthrough economies, despite the additional funding and take-up.
Concern has been voiced by energy-intensive industries such as steel and aluminium that if emission cuts are pushed too hard by EU regulators, it could lead to 'carbon leakage', a situation where companies move their production to countries with less strict regulations.
The Innovation Fund, as well as other financial incentives within the EU, are offered in the hope that industries will choose to adapt rather than move.
The Commission's strategy will have its first litmus test this September at a UN summit in New York. EU leaders are hoping to have devised a clear emissions roadmap to 2050 to show other major players the direction that the continent is heading in.
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