European Union wrangling on rules to govern state support of the oil and gas industry’s efforts to scrub and store carbon-dioxide emissions looks set to produce a near blanket ban on government funding.

An EU spokesperson confirmed the new rules Monday and Scandoil.com was sent a statement from a Brussels-approved advisor: “The Commission is currently working on the new rules for state aid and CCS projects, and they will be presented in late January.”

A new round of EU rule-making appears to have forbidden the “nearly 100 percent” funding believed needed to help the industry bring about the technology of CCS, a major setback should rules become law in January 2008. The EU once appeared entirely for stately support of carbon-capture and storage projects.

Earlier this year, a U.K. and Norway taskforce report suggested CCS technology was so pricy state support was a top priority. The U.K. government’s awarding of funds for a consortia to take up the challenge of CCS now appears unlikely (see Scandinavian Oil-Gas Magazine, No. 7/8 2007).

It’s not known how EU rules limiting state support of CCS R&D would hamper various industry initiatives: German companies BASF, Linde and R&D had in Septmber announced an alliance to find a carbon solvent, while state-supported Norwegian entity Gassnova and a number of energy companies had agreed to incubate the CCS work of four suppliers attempting to give the Mongstad gas power plant in western Norway carbon capture kit by 2014.

The Norwegians meet EU Energy Czar Andris Piebalgs on November 7. In the past, he has “chided” Norway of its stately support of key industries.

ws@scandoil.com

Tags: Aker Kvaerner, Mitsubishi, Shell, StatoilHydro