31 July 2010: European Commission sensible on coal subsidies, but not on nuclear fusion

The European Commission has done well in securing some – though not nearly enough – money to support renewables and CCS from the European economic recovery plan and from auctioning permits under the EU’s emissions trading scheme. The recovery plan’s grants are just €1 billion. By comparison, EU countries (particularly Germany and Spain) paid out €3 billion in national coal subsidies in 2008 alone. All OECD countries together give $400 billion every year in subsidies to fossil fuels, compared with $45 billion to nuclear and $27 billion to renewables, according to the International Energy Agency.

Some subsidies for coal are justifiable, for transitional employment reasons: the coal industry still provides 280,000 jobs across the EU. However, the only way to make coal subsidies compatible with climate policies is to shift them to CCS.

Germany, Poland, Spain, Romania, Slovakia and the Czech Republic have been lobbying the European Commission to be allowed to keep their national subsidies in place. On 20 July 2010, the Commission proposed a further transitional arrangement for four years – not ideal but much preferable to the 12-year extension it initially talked about. When the EU’s Council of Minister decides on the proposal later this year, the Commission should make sure that the four-year deadline is final. (For more on this, see The EU must support clean energy, not dirty coal.)

Getting grants for CCS has involved extensive work by NGOs and think tanks, as well as progressive parts of business. In stark comparison, the ITER nuclear fusion project seems able to get as much money as it wants, whenever it asks. The budget for this has almost tripled since 2001 and is now €16 billion, though construction has yet to start. The EU will have to pay €6.6 billion of this. The Commission is proposing to use an extra €1.4 billion, from unspent parts of the EU budget and the research programme (see EurActiv.com: Commission gives €1.4bn to ITER nuclear fusion project).

The Commissioners proposing this argued that:

ITER can provide a safe, clean and inexhaustible source of energy for the future”.

 Well, it could in theory, if it worked, but don’t hold your breath. The European Parliament and the Council of Ministers now both have to agree on the proposal. They should reject it. If there is €1.4 billion spare, it should go to renewables and CCS.

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