APPENDIX 5: CORRESPONDENCE WITH THE
GOVERNMENT
Letter from Sub-Committee C to Lord Hunt of Kings
Heath, Minister of State, Department for Energy and Climate Change
dated 19 October 2009
EM 11448/09 Communication from the Commission to
the European Parliament and the Council—Demonstrating Carbon
Capture and Geological Storage (CCS) in emerging developing countries:
financing the EU-China Near Zero Emissions Coal Plant Project.
Sub-Committee C considered this document at its meeting
on 15 October 2009 and cleared it from scrutiny.
The Committee has taken a great deal of interest
in China recently, including on climate change and energy issues.
In relation to the Commission communication, we were very concerned
to learn of the slow progress of this project, given its importance
in the global fight against carbon emissions and the pace of growth
of high emission coal-fired energy generation in China.
After all this time and publicity we are still in
the initial phase of this project, with no certainty of any funding
for phase three. We are very keen to understand, therefore, what
the realistic timescales are now likely to be for all three phases
to be completed. When will sufficiently reliable results of the
project be available so that Carbon Capture and Storage can actually
be rolled out in China?
We would also welcome your views on the initial management
of the project within the EU, and the degree of enthusiasm of
the Chinese government for this project.
Given the importance of this project, we are issuing
a press release tomorrow dated 20 October 2009.
Letter to Sub-Committee C from Lord Hunt of Kings
Heath, Minister of State, Department for Energy and Climate Change
to the Chairman dated 2 December 2009
Thank you for your letter of 19 October concerning
the EU-China NZEC Agreement. As you know, it was developed and
agreed under the UK's Presidency of the EU in 2005, and international
collaboration on CCS continues to be a high priority for the UK
Government in our efforts to avoid dangerous climate change.
Your letter expresses concern that we are still in
the initial stages of the project with no certainty of funding
for Phase III, the construction of the plant. In response, I would
like to highlight that a significant amount has already been achieved,
and emphasise my belief that we are well placed to deliver a demonstration
plant in China in parallel to those in the UK and elsewhere in
the EU.
Under Phase I, the China-UK NZEC[124]
Initiative, the China-European Commission COACH[125]
project, and the STRACO2[126]
project launched their results in Beijing on 28-29 October. Key
findings from the China-UK NZEC Initiative included that: there
is potential for CCS in China on the basis of cost, there is no
clear technology winner once CCS is commercially established,
the cost of deployment in China could be relatively cheap (approximately
£25 per tonne of CO2) due to lower labour and construction
costs in the Chinese power sector storage in oil reservoirs is
possible but limited and may not support a commercial scale demonstration
there may be significant storage in saline aquifers but further
assessment is needed.
More information on the Initiative is included in
the attached Summary Report.
These projects have built a significant amount of
institutional capacity, expertise, and business interest in CCS
in China, which will be essential to the success of the next Phases.
It is notable that China's Ministry of Science and Technology
now views successful demonstration as a critical pathway to any
subsequent programme of deployment. The China-UK NZEC Initiative
is also seen by many in the field as a potential blue print for
project-based capacity building in developing countries. We should
not downplay these achievements.
You are right to say that there is no agreed funding
for Phase III, apart from the European Commission's contribution
of €50 million, but the immediate objective has been and
continues to be to agree funding for Phase II. We have pledged
£6 million, on top of the European Commission's contribution
of €7 million, on condition that other European countries
also contribute. We would like to see further contributions confirmed
before the EU-China Summit on 30 November 2009.
The Commission is currently working with the Chinese
Government to agree detailed work objectives for Phase II. Once
Phase II is underway in 2010, and starts to draw conclusions on
what will be an appropriate technology and location for the demonstration
plant, we will be in a much better position to estimate the costs
and therefore the likely contributions to Phase III. After December's
Copenhagen conference, there should also be more clarity as to
whether or not the international climate framework will be able
to contribute funding to CCS demonstration.
As regards the timing of Phase III, we would also
like to see agreement before the EU-China Summit that the demonstration
plant should be operational by 2015. The UK and China agreed this
accelerated timetable at the China-UK Summit in February 2009.
We are working with the European Commission to see how we can
make this timetable consistent with their rules for issuing project
grants.
Concerning the management of the NZEC project to
date, the Chinese Ministry of Science and Technology have been
extremely complimentary about how the China-UK NZEC Initiative
has been co-ordinated and we have an excellent working relationship
with them.
We will continue to work with the European Commission,
the Chinese Government, other European Countries, and interested
stakeholders in ensuring the success of the next phases of NZEC.
I thank you for your interest in this important subject.
124 See: www.nzec.info Back
125
Co-operative action within CCS China-EU. See: www.co2-coach.com Back
126
Support to Regulatory Activities for Carbon Capture and Storage.
See: www.euchina-ccs.org Back
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