Hundreds of millions of euros in European Union funding for a clean energy technology program that would even allow coal to be turned into a clean fuel remain unclaimed due to lack of guarantees by private sponsors and governments, reflecting hurdles to the development of carbon capture and storage technologies.

The European Commission, which has executive powers in the EU, said Tuesday that the 275 million euros available for CCS in the first round of a funding program for clean technologies weren't awarded because of uncertainties about private or national contributions that would have to match EU funding.

"We actually did get a number of good projects that could have been supported, but (...) it is critical that either the project sponsors and/or the host member states guarantee for the other half [of the money] to avoid the funding gap and ensure that the project is viable," Connie Hedegaard, the EU Climate Change commissioner, said in a press conference. "Unfortunately, this did not happen for any of the eligible CCS projects."

After emerging as a possible silver bullet in the fight against climate change, the development of CCS has lost momentum, as low prices on the EU carbon market have crippled any incentive to invest billions of euros in clean technologies. CCS is still in its development phase and studies have shown it would be commercially viable with carbon prices as much as 10 times higher than the present ones.

It is, however, key to the EU's long-term ambitions because it is the only technology that would allow continued use of fossil fuels in producing electricity and may be even more important at a time of growing debate over the use of nuclear power. It could become crucial if some countries like Poland --that heavily rely on coal to produce electricity-- want to abate their CO2 emissions without having to alter their energy mix.

The system traps the CO2 emitted by a power plant or any other industrial installation and sends it, usually via pipeline, to underground reservoirs such as depleted oil fields. Its development raises logistical issues and public opposition. It also needs huge investments and the carbon price is key in triggering them.

The low carbon prices and the dim expectations about their level in the next years have dangerously slowed down the construction of demonstration plants needed to prove that the technology can work at a larger scale. At the same time, national governments are now under constant pressure to cut expenses and reign in their budgets.

Ms. Hedegaard said in some of cases private sponsors withdrew their support, while in others there was no clear indication that governments would close the funding gap. The money would be offered at a second call for proposal next year, she said.

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