Hopes of Europe becoming a world leader in the development of a key technology to combat global warming have been dashed.

More than €1.5 billion of EU funding available to support carbon capture & storage (CCS) projects will now be diverted to new renewable energy schemes.

The announcement today that steelmakers ArcelorMittal will not proceed with their Ulcos project in France means that not one single new CCS scheme is set to proceed.

Europe's Prime Ministers declared in 2007 that they wanted to see up to 12 CCS demonstration projects in operation by 2015.

The technology removes CO2 from fossil fuel power stations and industrial plants for permanent injection into rocks deep underground.

The UK's Coalition Government is committed to proceed with four CCS projects, but all require subsidy and the Treasury has preferred to turn down the offer of EU support rather than make a financial commitment itself.

Governments in the Netherlands, Romania and Poland have also failed to provide the additional money necessary.

ALDE MEP Chris Davies (UK, Liberal Democrats) was responsible for introducing the EU's special funding mechanism for CCS, and expressed bitter disappointment.

He said:

"This is a huge blow to efforts to combat climate change.

"Most studies suggest that CCS is needed to prevent more than 20% of global warming emissions escaping into the atmosphere, but the technology must be developed to bring down costs.

"Today's news marks a major failure by Europe to step up to the mark.  We talk big about the need for action yet fail to deliver."

ENDS