Britain's carbon capture dream is over after EU cash refused

""That's nearly £500 million of investment in northern England and Scotland that George Osborne just threw away," tweeted Chris Davies, the Liberal Democrat MEP who led discussion of the funding in the European Parliament.

A failure by the British Government to provide details of funding guarantees means that none of the carbon capture and storage (CCS) projects it put forward will receive funding from the European Union.

According to Chris Davies, the Liberal Democrat MEP who led discussion of the funding in the European Parliament, an EU official speaking on condition of anonymity said the reason for the decision was “a lack of funding detail".

A spokesman for the Department of Energy and Climate Change (DECC) said it had not been informed of the decision and refused to comment.

Under the NER300 competition, governments of Member States propose CCS and renewable energy projects for financial support from sale of greenhouse gas emission allowances from the EU European Emissions Trading Scheme by the European Investment Bank.

Chris Davies said the failure was "a devastating blow" to British hopes of becoming a world leader in CCS technology.

"The government has no excuse,” he said. “The EU funding mechanism was only introduced as a result of British pressure and for us not to take advantage of it is simply woeful."

CCS, which captures carbon emitted from the generation of electricity by burning fossil fuels and places it underground, is supposed to play a key part in the British Government's plans to meet its carbon emission reduction targets, especially under the Energy Bill.

Funding details may have been omitted from the application to the EIB pending finalisation of the contents of this Bill, which is due at the end of this month, and which is the subject of continued conflict between the Treasury and DECC.

"That's nearly £500 million of investment in northern England and Scotland that George Osborne just threw away," tweeted Chris Davies on hearing the news.

The Government submitted two projects at the end of October: Progressive Energy consortium's pre-combustion coal gasification project on Teesside and Alstom's 'White Rose' oxyfuel capture system at Drax's proposed new 304 MW coal-fired power station in North Yorkshire.

It is not clear if the same decision applies to the Sound of Islay tidal renewable energy project that was put forward for funding by the Government.

Britain's attempts to become a world leader in this currently unproven technology is now in a complete shambles.

Firstly, a previous competition which it held to fund pilot schemes fell apart over a year ago, as it proved too expensive and had to be relaunched.

There was no shortage of applicants in the second round, but, to much astonishment, the favourite project was not selected by the Government last month. This was the Don Valley Power Project, which had already earned first place among all NER300 CCS proposals.

DECC might have taken this unexpected decision because it wanted to maximise the UK’s overall financial return from NER300. NER300 support for Don Valley would have amounted to €130 million only, while the project replacing it, UK Oxy CCS Demo, would have got funding of €337 million.

Now it looks like DECC won't get any funding at all.