Commission Decision of 3 November 2010 laying down criteria and measures for the financing of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO 2 as well as demonstration projects of innovative renewable energy technologies under the scheme for greenhouse gas emission allowance trading within the Community established by Directive 2003/87/EC of the European Parliament and of the Council (notified under document C(2010) 7499) (2010/670/EU)

The number of allowances in the new entrants’ reserve referred to in Article 10a(8) of Directive 2003/87/EC shall be 300 million.

Selection of CCS and RES demonstration projects for funding under this Decision shall take place through two rounds of calls for proposals organised by the Commission and addressed to Member States, covering the equivalent of 200 million allowances for the first round of call for proposals, and the equivalent of 100 million allowances and the remaining allowances from the first round of calls for proposals for the second round of calls for proposals.

Subject to the fourth sentence in the fourth subparagraph of Article 10a(8) of Directive 2003/87/EC, financing under this Decision shall be 50 % of the relevant costs. Where the total request for public funding is less than 50 % of the relevant costs, the total request for public funding shall be financed under this Decision.

However, where financing under this Decision is combined with financing from the European Energy Programme for Recovery (EEPR), the financing under this Decision shall be reduced by the amount of financing received from the EEPR.

Any non-disbursed revenues from the first round of calls for proposals shall be available to support first-of-a-kind innovative, replicable and ready to demonstrate at scale CCS and RES demonstration projects, using relevant financial instruments managed by the European Investment Bank Group, with a priority given to the InnovFin EDP Facility and the Debt Instrument in the sector of transport under Connecting Europe Facility.

The preceding paragraph, Articles 6, 8, 11(1) to (5), the first and second subparagraphs of Article 11(6) and Article 13 shall not apply to the use of these revenues.

The Commission shall report sufficiently in advance to the Climate Change Committee on the development of the relevant Delegation Agreements between the Commission and the European Investment Bank, in particular as regards the related eligibility criteria, implementation of the relevant financial instruments, especially the build-up of the project pipeline, assessment of the project applications and finally on the use of the redeployed revenues, and take appropriate account of the views of Member States.

For the purposes of Article 2(3), the rules in paragraphs 2 to 5 of this Article shall apply.

The relevant costs of CCS demonstration projects shall be those investment costs which are borne by the project due to the application of CCS net of the net present value of the best estimate of operating benefits and costs arising due to the application of CCS during the first 10 years of operation.

Relevant costs of RES demonstration projects shall be those extra investment costs which are borne by the project as a result of the application of an innovative renewable energy technology net of the net present value of the best estimate of operating costs and benefits arising during the first 5 years compared to a conventional production with the same capacity in terms of effective production of energy.

The investment costs referred to in paragraphs 2 and 3 shall cover the cost of investment in land, plant and equipment.

Investment costs may also relate to investment in technology transfer and operating licenses of know-how (hereinafter ‘intangible assets’) where the following conditions are fulfilled:

1. the intangible asset can be considered as a depreciable asset;

2. the intangible asset is purchased on market terms at the lowest price possible;

3. the intangible asset remains in the establishment of the recipient for at least 5 years.

If the intangible asset is sold before the expiry of the 5-year period referred to in point (c) of the second subparagraph, the yield from the sale shall be deducted from the relevant costs.

The net operating costs and benefits referred to in paragraphs 2 and 3 shall be based on the best estimate of operating expenses borne by the project regarding production costs and take into account any additional benefits resulting from support schemes even if they do not constitute State aid within the meaning of Article 107(1) of the Treaty, avoided costs and existing tax incentive measures.

The calls for proposals shall be published in the Official Journal of the European Union.

Member States shall collect funding applications for projects that are intended to take place on their territory.

However, where a project is intended to take place on the territory of several Member States (hereinafter a ‘transboundary project’), the Member State receiving the funding application shall inform the other Member States concerned thereof and shall cooperate with the other Member States with a view to reaching a common decision on the submission of the project by the Member State receiving the funding application.

Member States shall assess whether a project meets the eligibility criteria referred to in Article 6. Where this is the case and where the Member State supports the project, that Member State shall submit the proposal to the EIB and inform the Commission thereof.

When submitting proposals for funding, the Member State shall provide the following information for each project:

1. the relevant costs, in euro, referred to in Article 2(3);

2. the total request for public funding in euro, which is the relevant costs minus any contribution to those costs from the operator;

3. the best estimate of the net present value of additional benefits resulting from support schemes as calculated according to Article 3(5);

4. for CCS demonstration projects, the total projected amount of CO2 stored in the first 10 years of operation, or, for RES demonstration projects, the total projected amount of energy produced in the first 5 years of operation.

Member States shall also notify the Commission of any financing for the project involving State aid pursuant to Article 108(3) of the Treaty so as to allow coordination of the selection procedure with the State aid assessment.

On the basis of the proposals submitted pursuant to paragraph 3 of this Article, the EIB shall perform an assessment of the financial and technical viability (financial and technical due diligence) of the project in accordance with Article 7.

Where that assessment has been concluded positively, the EIB shall, in accordance with Article 8, make recommendations for award decisions to the Commission.

On the basis of the recommendations referred to in paragraph 4, after reconsulting the Member States concerned to confirm, where appropriate, the value and structure of the total public funding contribution, and following an opinion from the Climate Change Committee pursuant to Article 3 of Council Decision 1999/468/EC⁽¹⁾, the Commission shall adopt award decisions addressed to the relevant Member States, indicating the awarded funding for the projects concerned in euro.