To ask the Secretary of State for Energy and Climate Change what his policy is on the use of revenues generated from the auctioning of pollution allowances in the EU Emissions Trading Scheme for the construction of new unabated but carbon capture ready coal-fired power plant, as referred to in the EU energy package; and what plans he has to discuss the use of these revenues with his EU counterparts. (264523)

EU Emissions Trading System (ETS) auction revenues will not be hypothecated to support the construction of new unabated carbon-capture ready coal-fired power plant.

In December 2008, the European Council adopted a political declaration indicating EU member states’ willingness to spend at least half of the auction revenues under the revised EU Emissions Trading System to tackle climate change both in the EU and in developing countries. This will include reducing emissions, adapting to climate change, developing renewable technologies and providing for the environmentally safe capture and storage of greenhouse gases.

In addition to this, the revised Emissions Trading System Directive provides for 300 million emissions allowances to be made available until the end of 2015 from the new entrant reserve to co-fund up to 12 commercial scale demonstrations of environmentally safe carbon capture and storage and innovative renewable energy technologies to provide an incentive for their rapid development.