Plans to build up to 12 demonstration plants in Europe by 2015 are at risk of being undermined by "self-centred competition" between member states, warned Chris Davies, a British Liberal MEP.
The European Investment Bank should be put in charge of the funds to avert that risk, he added.
Carbon capture and storage (CCS), a process of burying harmful gases, is seen by some as a potential silver bullet to curb coal-fired power plants' emissions, which are multiplying rapidly and threaten to heat the atmosphere to dangerous levels.
The EU wants 12 pilot projects in operation by 2015, and British MEP Chris Davies last year pushed through several billions of euros of funding to support that goal (EurActiv 12/12/08).
The funding has been provided as 300 million carbon emissions permits under the EU's emissions trading scheme, which means that their value will alter depending on the price of carbon permits when they are cashed in.
Davies warned EU leaders on Thursday of the risk the permits may be cashed in too soon, with carbon markets at relatively low levels.
"Premature auctioning of allowances by individual member states would reduce the total amount of financial support that could be secured," he said, adding the European Investment Bank is "best placed to manage the allowances".
"We must not permit short-sighted rivalry between member states to detract from realisation of the bold objective," he wrote in a letter to EU leaders and finance ministers.
"The highest possible value must be secured from the use of the 300 million allowances," he added.
The EIB, Davies said, "should be able to provide upfront finance for projects while ensuring that allowances are retained for auction at a time when the carbon market offers the best price".
(EurActiv with Reuters.)
