EU eyes CO2 capture in trade scheme

By Jeff Mason

BRUSSELS (Reuters) - Companies should get credit under the European Union's emissions trading scheme for capturing and storing carbon dioxide (CO2) instead of releasing it into the atmosphere, the European Commission will propose.

The draft legislation, part of a wider package of climate change rules, aims to integrate trapping and holding CO2 into the EU's trading scheme, giving firms another way to meet limits set on their output of the main gas blamed for global warming.

"CO2 captured and stored will be credited as not emitted under the emissions trading scheme," the draft document, obtained by Reuters on Wednesday, said.

The EU emissions trading scheme is the 27-nation bloc's key tool to fight climate change. It sets limits on the amount of CO2 that factories can emit.

Companies that come in beneath their target can sell the permits, while those that overshoot their limits must buy additional credits.

The proposal lays out rules to govern the process of trapping carbon, transporting it and injecting it into a geological space where it will not enter the atmosphere.

Critics say the technology is untested, but the Commission said it already exists. "The challenge is to facilitate widespread deployment, particularly in fossil fuel power generation," the document said.

A spokeswoman for Environment Commissioner Stavros Dimas declined to comment.