German, UK coal plants on carbon capture shortlist

BRUSSELS, Oct 2 (Reuters) - Pioneering technology to trap and bury carbon dioxide emissions from coal could receive hundreds of millions of euros of European Union funding in seven countries including Britain and Germany, EU officials say.

Funding applications from the Hatfield power station in northern England and Vattenfall's [VATN.UL] Jaenschwalde plant in Germany have received approval from the European Union's executive, the European Commission, said two officials close to the selection process.

Both companies said they had received no confirmation.

The plants will use Carbon Capture and Storage (CCS) technology, a process of burying climate-warming gases that some see as a potential silver bullet to halt climate change.

The technique, which can add about $1 billion to the cost of each power plant, would help the EU by allowing it to keep burning highly polluting coal without doing further harm.

The funding, which could total 180 million euros ($262 million) for each project, was proposed as part of a 4 billion euro package agreed in May to protect the European grid from future energy crises.

A list of 13 CCS projects drawn up at the time has been whittled down to seven by the European Commission, and that list has been presented to a number of EU diplomats.

Britain's Hatfield site, operated by Powerfuel, is seen as well positioned for CCS, as the pipelines used to carry CO2 could one day be extended to nearby operators such as the giant Drax Power plant (DRX.L: Quote, Profile, Research).

France could receive up to 50 million euros for its Florange pipeline project to transport carbon dioxide from a steel plant into underground storage.

One EU official said funding was also going to Spain's Endesa (ELE.MC: Quote, Profile, Research) for its Compostilla plant and the Maasvlakte plant owned by Germany's E.ON EONG.DE and Belgium's Electrabel (GSZ.PA: Quote, Profile, Research) near the Dutch port of Rotterdam. (Reporting by Pete Harrison; editing by James Jukwey)