EU says up to 1.5 billion euros ready for low-carbon investment

LONDON (Reuters) - Up to 1.5 billion euros could be available by the end of this year to fund renewable energy and carbon capture and storage projects across the European Union bloc, the European Commission said on Thursday.

The money comes from a program that auctions EU carbon permits to market participants taking part in the regional cap-and-trade scheme, with the revenue earmarked for various projects that were submitted in a call for proposals.

"The Commission estimates that co-funding of 1.3-1.5 billion euros could be available for the first call," it said in a statement.

"This would allow some three carbon capture and geological storage projects and up to 16 renewable energy projects to be co-funded," it said.

The projects are likely to be supported in more than half of the 27-nation bloc, including a number of countries currently in economic and fiscal difficulty, the Commission added.

Member states will be asked to confirm the projects and national co-funding in early 2012, and the Commission will finalize its funding decisions by the end of the year.

The exact amount of funding will depend on how much is raised through the sale of 200 million carbon permits. The sales, which have been carried out by the European Investment Bank since December 2011, will be concluded in October.

The EIB has raised around 1.14 billion euros from the carbon permit sales so far.

But a collapse in carbon prices to record lows over the past year means the permit sales will provide less money for cleaner energy projects than initially planned.

A shortlist of project proposals can be found here: http://ec.europa.eu/clima/news/docs/2012071201_swd_ner300.pdf

(Reporting by Jeff Coelho; editing by James Jukwey)