TAIEX workshop « European experience with restructuring, privatisation and investment in the coal industry », Kiev, November 5th, 2010 Overview of European.

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1 TAIEX workshop « European experience with restructuring, privatisation and investment in the coal industry », Kiev, November 5th, 2010 Overview of European Union policies & legislation with a focus on coal Thomas H A SCHNEIDER German Hard Coal Association EUROPEAN COMMISSION

2 | 2 CCS COMMUNICATION Outline. Introduction: policy objectives influencing the coal value chain. Treaties and legislation - an overview. Clean Coal Technologies. CO 2 Capture & Storage

3 | 3 CCS COMMUNICATION Principles of EU Energy Policy. Competitiveness: internal market, competition, interconnections (TEN-T), European electricity grid, research & innovation (clean coal, CO2 capture & storage, alternative fuels, energy efficiency, nuclear). Sustainability: renewable energies, energy efficiency, nuclear, innovation & research, emission trading. Security of Supply: international dialogue, European stock management (oil/gas), refining capacity and storage of energy, protection against terrorism, diversification Sustainability:Kyoto Security of Supply: Moscow Competitiveness:Lisbon European Union Energy Policy

4 | 4 CCS COMMUNICATION TARGETS OVERVIEW ENERGY MIX ETS COALNUCLEAR OIL ROAD MAP Offshore wind, 2nd generation of bio-fuels, smart grid, etc. CCS Nuclear Safety and Waste Management CO 2 20 (30)% 2020 >50% 2050 CCS EFFICIENCY 20 % 2020 BIO-FUELS 1 % 2005 5.75 % 2010 8 % 2015 10% 2020 ELECTRICITY 15 %2005 21 %2010 HEATING & COOLING 9 % 2005 [ 12 % 2010] POLICIES & TECHNOLOGIES RENEWABLES 12 % 2010 15 % 2015 20% 2020 GAS

5 | 5 CCS COMMUNICATION Core Objectives in the Commission‘s 2007 Energy and Climate Package: 3 x 20% by 2020. 20% Energy Efficiency increase. 20% GHG reduction compared to 1990 » Independent commitment. 30% GHG reduction compared to 1990 » In case of international agreement. 20% renewables in energy mix. 10% biofuels in transport » If production is sustainable » If second generation biofuels commercially available

6 | 6 CCS COMMUNICATION èWithin the EU at least 20% reduction of greenhouse gas emissions by 2020, as compared to 1990 èNegotiations with developed countries: 30% reduction of greenhouse gas emissions by 2020, as compared to 1990 èDeveloping countries: Immediate decoupling of GHG emissions and economic development, absolute emissions reductions after 2020 èDeforestation: Stop within two decades, reforestation afterwards The EU’s Strategic Objectives

7 | 7 CCS COMMUNICATION Outline. Introduction: Policy objectives influencing the coal value chain. Treaties and legislation - an overview. Clean Coal Technologies. CO 2 Capture & Storage

8 | 8 CCS COMMUNICATION Treaties and Legislation (I). Lisbon Treaty. Kyoto Protocol (binding GHG reduction targets). Energy Community for South East Europe. Int’l maritime treaties (London protocol, OSPAR convention)

9 | 9 CCS COMMUNICATION Lisbon Treaty. Entry into force on December 1st, 2009. The Treaty of Lisbon amends the current EU and EC treaties, without replacing them. It provides the Union with the legal framework and tools necessary to meet future challenges and to respond to citizens' demands:. A more democratic and transparent Europe. A more efficient Europe. A Europe of rights and values, freedom, solidarity and security. Europe as an actor on the global stage. New: Energy chapter („Europeanisiation“ of energy policy). http://europa.eu/lisbon_treaty/glance/index_en.htm

10 | 10 CCS COMMUNICATION Energy Community for SE Europe. The Energy Community entered into force on 1 July 2006. The parties have committed themselves to liberalise their energy markets and implement key EU legal acts in the area of electricity, gas, environment and renewable energy. The secretariat in Vienna monitors and assists in the implementation process. Full Members: The European Union, Albania, Bosnia and Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Montenegro, Serbia and the United Nations Interim Administration Mission in Kosovo and Moldova. Observer Status: Georgia, Norway and Turkey.. http://www.energy- community.org/portal/page/portal/ENC_HOME

11 | 11 CCS COMMUNICATION Treaties and Legislation (II). R & D - European Community for Steel and Coal - Research Fund for Coal and Steel, RFCS - FP7 Research framework programme (2007-2013) - Strategic Energy Technology Plan (SET- Plan)

12 | 12 CCS COMMUNICATION EU Coal Research & Development ►European Community for Steel & Coal, ECSC ○R & D since 1950s ○ expired in 2002 ►Early R & D Framework Programmes, FP 1 – 5 ○1st CCS project as early as 1993 (Weyburn oilfield) ○ fossil fuels not covered in FP6 ►Special Programmes (Thermie, Carnot)

13 | 13 CCS COMMUNICATION European Community for Steel & Coal -Examples of major developments – ►Hard Coal Mining ○ Enhancing occupational health & safety ○ Mechanisation/automation of underground extraction ○ Mine waste management/ by-products ► Lignite mining ○ Transition to large scale opencast operations ○ Change to conveyor transport systems ○ Airborne surveying methods/ Photogrammetry

14 | 14 CCS COMMUNICATION. A research fund with a budget of ~60 M€/year. Promoting industrial research in the field of » Coal » Steel. Open call for proposals for » Research projects » Pilot & Demonstration projects » Accompanying measures » Deadline: September 15th of each year. Outside the FP…yet closely co-ordinated & complementary WHAT is the RFCS Programme? RFCS funding allocation ~ 44 M€/y ~ 16 M€/y Coal 27.2% Steel 72.8%

15 | 15 CCS COMMUNICATION. History » ECSC* Treaty expired in July 2002 » Assets left: ~ 1.6 bn€ » 1 Feb 2003: creation of the RFCS. RFCS » Management of ECSC assets » A smart financial design yearly returns (60 M€) used for R&D in Coal & Steel R&D activities are cost-neutral for EU tax-payers » ‘Continuity & Change’ » http://cordis.europa.eu/coal-steel-rtd / http://cordis.europa.eu/coal-steel-rtd / WHY the RFCS Programme? * ECSC: European Coal and Steel Community Support competitiveness & sustainable development in the EU Coal and Steel industry

16 | 16 CCS COMMUNICATION Improving the competitive position of Community Coal Efficient protection of the Environment & improvement of the use of coal as a clean energy source Health and Safety in Mines Management of external dependence on energy supply RFCS research priorities - Coal

17 | 17 CCS COMMUNICATION Technical Groups Coal SOURCING CONVERSION COMBUSTION Coal mining Mine infrastructure & Mgt. Mine infrastructure & Mgt. CO 2 geol. storage CO 2 geol. storage Underground gasification Underground gasification CBM, ECBM, CBM, ECBM, … … Coal preparation Coal preparation Coal gasification Coal gasification Hydrogen from coal Hydrogen from coal Synfuels Synfuels … … Clean & efficient coal combustion Carbon management strategies Carbon management strategies CO 2 capture CO 2 capture Zero emissions & high efficient PG Zero emissions & high efficient PG Co-combustion coal & biomass/waste Co-combustion coal & biomass/waste CHP from coal CHP from coal … … 35% 22% 43% Average RFCS funding allocation for COAL projects (2005-2007)

18 | 18 CCS COMMUNICATION Fossil Fuel Value Chain in FP7 Specific Programme COOPERATION, thematic areas: ENERGY (€2.35bn) NANO-SCIENCES/TECHNOLOGIES AND NEW PRODUCTION TECHNOLOGIES (€ 3.475bn) ENVIRONMENT (€1.89bn)

19 | 19 CCS COMMUNICATION Thematic Area ENERGY CO2 capture and storage technologies for zero emission power generation ►Costs of CO2 capture down to €20/t ►Capture rates above 90% Clean coal technologies ►Conversion technologies, incl. poly-generation ►Increase plant efficiency and reliability ►Minimize pollutant emissions

20 | 20 CCS COMMUNICATION Treaties and Legislation (III). State Aid - Council regulation 1407/2002 on state aid to the coal industry - Public service obligations: Electricity production of up to 15% from indigenous primary fuel sources (2nd Electricity market directive 2003/54/EC) - Regional aid - State aid for environmental purposes

21 | 21 CCS COMMUNICATION Treaties and Legislation (IV). Coal market - Regular meetings of National Coal Experts - Coal imports: reporting of border prices per semester - EU Energy Recovery Plan 2009 (. Internal market for energy: common rules for the internal market in electricity - 1st Electricity Market directive 96/92/EC - 2nd Electricity Market directive 2003/54/EC - 3rd Electricity Market directive 2009/72/EC http://europa.eu/legislation_summaries/energy/internal_ener gy_market/l27005_en.htm

22 | 22 CCS COMMUNICATION Treaties and Legislation (V). Environment - Environmental impact assessment: EIA Directive (Directive 85/337/EEC, as amended by Directives 97/11/EC and 2003/35/EC)EIA Directive (Directive 85/337/EEC, as amended by Directives 97/11/EC and 2003/35/EC) - Directive on Strategic Environmental Assessment (Directive 2001/42/EC) - Flora Fauna Habitat directive 92/43/EEC incl. „Natura 2000“ network - EU water framework directive 2000/60/EC - Soil framework directive, proposal COM(2006) 232 of 22 September 2006

23 | 23 CCS COMMUNICATION Treaties and Legislation (VI). Occupational safety and health - Council Directive 89/391/EEC of 12 June 1989 on the introduction of measures to encourage improvements in the safety and health of workers at work89/391/EEC - Human Vibration Directive 2002/44/EC - Noise at Work Directive 2003/10/EC - EU Working Time Directive (2003/88/EC)2003/88/EC

24 | 24 CCS COMMUNICATION Outline. Introduction: policy objectives influencing the coal value chain. Treaties and legislation - an overview. Clean Coal Technologies. CO 2 Capture & Storage

25 | 25 CCS COMMUNICATION Sustainable use of coal: starting point. Intergovernmental Panel on Climate Change, IPCC: unless we cut greenhouse gas emissions - especially CO 2 - by 50%-80% (compared to today) by 2050, the impact on global warming will be disastrous. World energy demand is expected to double by this date, the challenge will be enormous.. It means we must act fast, using a portfolio of solutions, no single solution being capable of reducing CO 2 emissions on the massive scale required. This includes renewable energies, energy efficiency, and CO 2 _CAPTURE_&_STORAGE_(CCS).. If deployed in all industry sectors, CCS could reduce CO 2 emissions by over 50% by 2050.CCS could reduce CO 2 emissions by over 50% by 2050

26 | 26 CCS COMMUNICATION European Commission: concept of sustainable coal utilisation Sustainable use of coal = Clean Coal Technologies + CO 2 Capture & Storage Source: Communication of the Commission of 10 January 2007, COM(2006) 843 final: “Sustainable power generation from fossile fuels - Aim: near emission- free coal use after 2020”

27 | 27 CCS COMMUNICATION Clean Coal Technologies - Implementation in the EU. Integrated Pollution Prevention and Control (IPPC) Directive), COM 96/61/EC of 24 September 1996. Large Combustion Plant (LCP) Directive, COM 2001/80/EC of 23 October 2001. Mining Waste Directive, COM 2006/21/EC of 15 March 2006. Industrial Emissions Directive, COM 2008/1/EC of 15 January 2008 (codification of IPPC Directive). Commission proposal of 21 December 2007 on a extended IE directive, aiming at merging IPPC directive and six “sectoral” directives, endorsed by the European Parliament on 7 July 2010

28 | 28 CCS COMMUNICATION IPPC Directive – Kategorien der behandelten industriellen Aktivitäten 1Energiesektor 1.1 Verbrennungsanlagen mit einem thermischen Eingangsleistung > 50MW 1.2 Öl- und Gasraffinerien 1.3 Kokereien 1.4 Anlagen zur Kohlevergasung und -verflüssigung 2Gewinnung und Verarbeitung von Metallen 3Mineralverarbeitende Industrie 4Chemische Industrie 5Behandlung von Abfällen 6Andere Aktivitäten (z. B. Papier- und Textilherstellung, Schlachthäuser)

29 | 29 CCS COMMUNICATION IPPC Directive - Principles The IPPC Directive is based on several principles, namely. (1) an integrated approach,. (2) best available techniques,. (3) flexibility and. (4) public participation.

30 | 30 CCS COMMUNICATION Best available techniques, BAT Net plant efficiencies for construction of power stations (with specific CO 2 emissions): % Kg/MW el. Lignite43,5 935. Hard coal 46,5 735. Natgas(Gas & steam)57,0 354

31 | 31 CCS COMMUNICATION Outline. Introduction: policy objectives influencing the coal value chain. Treaties and legislation - an overview. Clean Coal Technologies. CO 2 Capture & Storage

32 | 32 CCS COMMUNICATION CO 2 -Abscheidung und Speicherung – Beitrag zur Emissionsreduzierung und eine neue Wertschöpfungskette. Abscheidung des CO 2 ► vor oder nach dem Verbrennungs- bzw. Konversionsprozess. Transport des hochreinen CO 2 ► Kontinuerlich, d. h. per Rohrleitung ► Diskontinuerlich, z. B. durch Tankschiffe. Speicherung bzw. Verwertung des CO 2 ► Geologische Speicherung ► “Ocean storage”: offene Lagerung auf dem Meeresboden ► Verwertung: begrenzte Optionen

33 | 33 CCS COMMUNICATION CO 2 -Abscheidung: bevorzugte Techno- logieoptionen

34 | 34 CCS COMMUNICATION CO 2 -Abscheidung: Maßnahmen zur Verringerung der Kosten. Reduzierung der Investitionskosten durch ► einfaches, robustes Equipment ► Maximierung der Skaleneffekte (economies of scale) ► Sicherstellung von genügendem Marktpotential für die Technologien. Reduzierung der Unterhaltungskosten durch ► einfaches, robustes Equipment mit langen Lebenszeiten der Komponenten ► Diskontinuerlich, z. B. durch Tankschiffe. Minimierung des Energiebedarfs durch ► Erhöhung der Energeeffizienz der CO2-Abscheide- & Speicherprozesse und deren Integration in die Stromerzeugung ► Verringerung der Betriebsstoffmengen. Sicherstellung einer hohen Betriebsverfügbarkeit durch ► Ausbildung und Schulung der Mitarbeiter ► Verbesserte System- und Prozesssteuerung für integrierte Abscheide-, Verbrennungs-, transport- und Speichersysteme

35 | 35 CCS COMMUNICATION CO 2 -Abscheidung: Erwartete Vermeidungs- kosten für industrielles Kraftwerk in 2020

36 | 36 CCS COMMUNICATION Post Combustion CO 2 -Abscheidung: Entwicklungsstand der Technologie

37 | 37 CCS COMMUNICATION Pre Combustion CO 2 -Abscheidung: Entwicklungsstand der Technologie

38 | 38 CCS COMMUNICATION Oxyfuel-Prozess: Entwicklungsstand der Technologie

39 | 39 CCS COMMUNICATION 30 MW Oxyfuel-Pilotanlage am Standort Schwarze Pumpe der Vattenfall Europe AG

40 | 40 CCS COMMUNICATION Braunkohlekraftwerk Jänschwalde: Planung für 250 MW el-eq Oxyfuel-Demonstrationsanlage

41 | 41 CCS COMMUNICATION 300 Mton 1600 Mton 7000 Mton Cluster-Bildung mit Infrastruktur am Beispiel der Niederlande

42 | 42 CCS COMMUNICATION CO 2 -Transport per Schiff

43 | 43 CCS COMMUNICATION Optionen der geologischen CO 2 - Speicherung

44 | 44 CCS COMMUNICATION Globale Potentiale für die geologische Speicherung von CO 2 Abschätzung der Dimensionen bei den Potentialen für geologische Speicherung: x 1000 Tiefe saline Aquifere (Porenspeicher) x 100 Nutzung in Öl- & Gasfeldern incl. Speicherung x 10 Ungewinnbare Kohleflöze incl. Flözgasge- winnung (enhanced coal bed methane recovery) x 1Sequestrierung durch Mineralisation

45 | 45 CCS COMMUNICATION Bisherige und aktuelle Projekte zur geologi- schen Speicherung von CO 2. Perm-Becken, USA: 35 Mt/a, seit 1972; mehr als 70 Projekte mit einer Gesamtmenge von 500Mt. Sleipner-Gasfeld, Norwegen: 1 Mt/a unter der Nordsee seit 1996. Weburn/Saskatchewan, Kanada: 2 Mt/a seit 2000 für EOR (enhanced oil recovery). K12B-Feld, Niederlande: einige 100 Kt/a für EGR (enhanced gas recovery) seit 2004. In Salah-Gasfeld, Algerien: 1,2 Mt/a seit 2004. Nagaoka, Japan: 10,4 Kt in 2004/2005. Ketzin/Potsdam, Deutschland: ca. 60Kt total, seit 2007. Snøvit-Gasfeld, Norwegen/Barentsee: 0,8 Mt/a, seit 2007. Gorgon-Gasfeld, Westaustralien: 129 Mt total, ab 2008-2010

46 | 46 CCS COMMUNICATION Sedimentäre Becken in Europa

47 | 47 CCS COMMUNICATION Industrielle CO 2 -Quellen in Europa

48 | 48 CCS COMMUNICATION Prinzipielle Hürden zur Umsetzung der CO 2 - Abscheidung & Speicherung. Technische Barrieren. Ökonomische Barrieren. Geeigneter Rechtsrahmen auf nationaler, europäischer und internationaler Ebene. Öffentliche Akzeptanz für das integrierte Konzept, insbesondere Speicherung

49 | 49 CCS COMMUNICATION Dokumente/Entscheidungen der EU zur Förderung der CO 2 -Abscheidung & Speicherung. Mitteilung der Kommission vom 10. Januar 2007, COM(2006) 843 final: “Nachhaltige Stromerzeugung aus fossilen Brennstoffen - Ziel: weitgehend emissionsfreie Kohlenutzung nach 2020”. EU-Ratsgipfel, März 2007: volle Unterstützung für o. e. Dokument. Plan für Strategische Energie-Technologien (“SET-Plan”) vom 29. September 2007. “Energie- und Klimaschutz-Paket” der Kommission vom 23. Januar 2008: » Richtlinie zur Speicherung von CO 2 (“CCS Directive”) » Mitteilung zur Unterstützung der frühzeitigen Demonstration der nachhaltigen Kohlenutzung (“CCS Communication”) » Vorschlag für Handel mit Emissionszertifikaten (“EU ETS post 2012 Directive”) » Rahmenrichtlinie für Beihilfen zum Umweltschutz

50 | 50 CCS COMMUNICATION Interesse der EU-Staaten an CCS-Demoprojekten CountryNo. of demo plants wanted/ considered Current R & DBudget for CCS demo projects Choice of add. support Bulgaria1SCF Czech Republic1SCF, ETS GermanyAt least 2-3> €30M/yFIT Latvia1SCF The NetherlandsAt least 1< €100M by 2012 €92M by 2012 NorwayAt least 1> €600MO Poland1-2SCF Spain2ca. €100MFIT Slovenia1SCF Romania1SCF United KingdomAt least 1£35MUp to £1bnFIT ETS: Emissions Trading System FIT: Feed-In Tariffs SCF: Structural/Cohesion Fund O: Other means

51 | 51 CCS COMMUNICATION Thank You for Your Attention