State aid: Commission approves UK support scheme for early study work on carbon capture and storage demonstration projects
European Commission - IP/13/254 20/03/2013
Brussels, 20 March 2013
The European Commission has found a UK scheme to fund front-end engineering design (FEED) studies on carbon capture and storage (CCS) demonstration projects to be in line with EU state aid rules. In particular, the measure will contribute to fighting climate change, in line with EU objectives, without unduly distorting competition in the Single Market.
This measure is part of the UK CCS Commercialisation Programme, which aims to support practical experience in the design, construction and operation of commercial-scale CCS technology. In this context, FEED studies are meant to reduce the technical, environmental and financial risks of the construction of commercial-scale CCS-equipped plants before a final investment decision is taken.
In January 2013, the UK notified its intention to fund, with direct grants, expenses for FEED studies for pre-selected projects, which were insufficiently mature to justify the immediate award of a project contract.
The development of CCS technology has been recognised by the EU as a valuable means to mitigate climate change. The measure therefore pursues an objective of common interest. Moreover, the Commission's investigation found that the competitive selection process established by the UK will limit the aid to the minimum necessary and will thus avoid undue distortions of competition. The Commission therefore concluded that the measure is an appropriate and proportionate means for reaching this objective.
The Commission assessed this measure under Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which allows aid to facilitate the development of certain economic activities, provided it does not adversely affect trading conditions to an extent contrary to the common interest.
In April 2009, the Commission had already approved UK support for CCS FEED studies in the context of the "Demonstration 1 Project" (case N74/2009).
The non-confidential version of the decision will be made available under the case number SA.35050 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News