The Official Journal of the European Union published on 6 November 2010 Commission's Decision C(2010) 7499, laying down the criteria and measures for the financing of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO2, as well as demonstration projects of innovative renewable energy technologies under the scheme for greenhouse gas emission allowance trading within the Community.

The European Council of June 2008 called on the Commission to bring forward as soon as possible a mechanism to incentivise Member State and private sector investments to ensure the construction and operation by 2015 of up to 12 carbon capture and storage (‘CCS’) demonstration plants. Within this context, the Commission now establishes both the rules and criteria for the selection and implementation of those projects and the basic principles for the monetisation of allowances and for the management of revenues, with a view to ensuring a smooth functioning of the mechanism established by Directive 2003/87/EC.

The Commission's Decision establishes the rules and criteria for:

• The selection of commercial demonstration projects that aim at the environmentally safe capture and geological storage of CO2, the so-called 'CCS demonstration projects', and demonstration projects of innovative renewable energy technologies, also called ‘RES demonstration projects’.
• The monetisation of the allowances referred to in Directive 2003/87/EC for the support of CCS and RES demonstration projects, and the management of the related revenues.
• The disbursement of revenues and the implementation of CCS and RES demonstration projects.

The financing under this Decision should be reserved for projects which make use of technologies which are innovative in relation to the state-of-the-art in the key substreams for each technology. Those technologies should not yet be commercially available, but sufficiently mature to be ready for demonstration at pre-commercial scale.

Funding under this Decision will be conditional on clearance by the Commission of any State aid component of the overall financial contribution from public sources, with a view to ensuring that funding is limited to the extent necessary for implementation and operation of the project, taking into account potential negative effects on competition. Member States notification will therefore be required. As the financing is not part of the general budget of the European Union, it can be combined with financing from other instruments, including the Structural and Cohesion Funds and the European Energy Programme for Recovery (EEPR). It can also be combined with loan financing provided under the Risk-Sharing Finance Facility (RSFF) set up by the Union and the European Investment Bank (EIB).

In order to avoid a subsidy competition between Member States, financing under Commission's Decision should be fixed at 50% of the relevant costs, unless the total amount of funding under it would exceed the limit of 15% of the total available allowances as referred to in Directive 2003/87/EC, in which case funding should be limited to 15% of the total available allowances.