Norway Offers to Join Europe's Carbon Capture Efforts

Norway said on Wednesday it has put on hold plans to fund its first full-scale carbon capture and storage (CCS) plant and will instead help pay for a project in the European Union.

Environmental campaigners say the move, announced on Wednesday by Oil and Energy Minister Tord Lien, means the oil-rich nation will miss its internationally-binding emissions target for 2020.

The International Energy Agency says deployment of CCS technology is critical to reducing carbon emissions and limiting a global temperature rise to 2 degrees Celsius this century.

Lien said the government was still looking at a possibility of building a large-scale CCS at home, and was also willing to join efforts elsewhere in Europe.

"We have proposed to commit funding of up to 125 million Norwegian crowns ($19.3 million) to participate in such a co-operation," Lien said a statement, after the government released its draft 2015 budget.

Norwegian daily VG reported the money could go to a project in the Netherlands, citing government sources.

Europe once aimed to lead the world in CCS development but has reined in ambition to just three big schemes expected to go ahead in the near term, including the Netherlands' ROAD project backed by utilities E.ON and GDF Suez.

Norwegian environmental group Bellona said giving money to foreign CCS projects would not help to reduce carbon emissions in the country, the world's seventh-largest oil exporter and Western Europe's top gas supplier.

"We don't need more studies, we need CCS right now. Otherwise, Norway is set to miss its target to reduce carbon emissions by 30 percent from 1990 levels," Sirin Engen, Bellona's spokewoman for CCS, told Reuters.

In 2013, Norway's emissions were 52.8 billion tonnes, 4.8 percent above the 1990 benchmark.

Norway's previous centre-left government dropped plans to build a full-scale CCS to reduce emissions from Statoil (STO)'s Mongstad oil refinery, one of the top emitters in the country.

Canada became the first country to launch a full-scale commercial CCS to cut emissions from a coal-fired power plant earlier in October, with the government providing $240 million in funding.

(1 US dollar = 6.4714 Norwegian krone)

(Reporting by Nerijus Adomaitis, additional reporting by Alister Doyle and Ben Garside, editing by William Hardy)