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funding programmes for innovative low carbon energy demonstration

projects’. The scheme is seen as a ‘catalyst for the demonstration of

environmentally safe Carbon Capture and Storage (CCS) and innovative

renewable energy technologies on a commercial scale’. The instrument,

the director said, had not been a particular success.

“The NER 300 was meant to help energy intensive industry adjust to the

new low carbon economy – that hasn’t really worked out. The NER 400

should build on this, and we need a significant upgrade of that fund.

“There are a number of interesting lab stage areas where venture capital

technology is developing that could help or support energy intensives to

stay in Europe and be protected, for example the industrial CCS clusters,

clean cement or green cement, or green steel.

“Those developments at lab stage are under-invested and under-

accelerated, and we actually think we have a great value in keeping

energy intensives in Europe and making their goals and their business

models compatible with the low carbon economy.”

Horizon 2020

The EU’s framework programme for R&I dedicates over €3bn to ‘climate

action, environment, resource efficiency and raw materials’ research, a

move that is particularly important, said Wolff.

“Investment in innovation is indeed the name of the game; the low carbon

transition would be won by innovation, not only by rules or regulations,

and its innovative spirit would make that happen. There is a pledge in

Europe for R&D investment of 3% of GDP, which is not currently

happening. In other areas of the world, China is massively investing in

clean technologies and is alone dwarfing European investment into smart

grids, advanced materials and renewable energies.

is seen, certainly by the Commission, as the

instrument to achieve those targets.

“The cap of the ETS has been designed to last

until 2020, and so with a new horizon it has now

been extended with new policy frameworks; the

Commission acknowledged the need for repair

and a need for upping the carbon price to make

the instrument effective. It is encouraging that

back-loaded as well as unallocated allowances

will go straight into reserve and not come back

onto the market right away, which would have

actually led to levels of distortion. The 2019

introduction is better than 2021, although the

governments in the UK, Germany and

France would have probably supported a

2017 introduction.

“The second area is the carbon leakage list,

where everyone agrees that the leakage

criteria led to too wide a group getting free

allowances. Those who really are exposed to

carbon leakage are not protected, and this

creates some distortions. We think the criteria

need to be revised in order to make this a

sharp weapon.”

Innovation fund

Wolff then drew attention to the EU’s NER 300

programme, which, according to the European

Commission, ‘is one of the world’s largest

www.horizon2020projects.com

H O R I Z O N 2 0 2 0 P R O J E C T S : P O R TA L

I S S U E S E V E N

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S O C I E TA L C H A L L E N G E S : C L I M AT E A C T I O N

The European

Commission is

undertaking reforms to

update the ETS