18 May 2011

The British Government has set a goal of halving carbon dioxide emissions by 2025, after a tumultuous week of cabinet rifts on the issue. These are the most ambitious  greenhouse gas targets of any developed country and well above the EU's target of a 20% emissions reduction by 2020.  

Getting agreement on the UK targets took weeks of wrangling among ministers, according to a report in the Guardian newspaper. But late on Tuesday afternoon the energy and climate secretary, Chris Huhne, announced to parliament that the "carbon budget" – a 50% emissions cut averaged across the years 2023 to 2027, compared with 1990 levels – would be enshrined in law.

Connie Hedegaard, the European Union's climate change chief, hailed the outcome as "very encouraging" and "an example" to other countries, which she said showed that countries could pursue economic growth while cutting emissions. "This is a recognition that to be very ambitious on public spending [cuts] does not mean you can't be ambitious on climate change targets," she told the Guardian.

David Kennedy, chief executive of the Committee on Climate Change, the government advisory body that proposed the target, said: "This is going to deliver higher [economic] growth for the UK. It could well give us lower electricity prices in the future than our competitors."

The announcement backed a push for renewables, particularly offshore wind and marine energy. Environmental group WWF welcomed the commitment and said it represents a "meaningful step towards a low-carbon UK". Keith Allott, WWF-UK's head of climate change said the UK is demonstrating "genuine leadership" on climate change.

Meanwhile, according to the Environmental Finance website, EU member states have put forward 78 large-scale renewable energy and carbon capture and storage (CCS) projects to compete for funds from the EU's NER 300 programme.

This will be funded by the sale of 300 million carbon allowances from the EU emissions trading system (ETS)'s New Entrants Reserve (NER) - a quantity of allowances set aside for newly built installations. The allowances are worth about €5 billion ($7 billion) at the current carbon price and the European Commission expects the scheme to leverage around the same amount from private sources.

According to an initial screening of the projects by the European Investment Bank (EIB), member states have submitted applications for 13 CCS projects and 65 projects involving innovative renewable energy technologies.

The majority of projects in the latter category are based on bioenergy technology, with the wind sector trailing in second position. The NER 300 programme aims to fund at least eight CCS and at least 34 innovative renewable energy demonstration sites.

The EIB has begun its financial and technical due diligence assessments of the dossiers, which it aims to conclude by February 2012. The Commission will then present the bank's recommendations to the EU climate change committee, on which all member states are represented, before announcing the final list of chosen projects in the second half of next year. At least one project and up to a maximum of three will be funded per member state.

The UK Government has submitted 12 applications – seven CCS and five renewables projects – for consideration by the EIB. The renewables proposals are focused mainly on harnessing wave and tidal power off the coast of Scotland. UK energy minister Charles Hendry said he was "very encouraged by the strength and breadth of the UK applications for this round of NER funding, with all the projects received by DECC [the Department of Energy and Climate Change] meeting the eligibility criteria".

Sources: Environmental Finance and The Guardian