Swedish utility Vattenfall has announced the termination of its planned EUR1.5bn ($2bn) investment in the high-profile carbon capture and storage (CCS) demonstration project at its Janschwalde plant, blaming the ongoing uncertainty over the German CCS law.

The project, supported by the European Union, would have been operational by 2015-2016, representing one of the first demonstration this technology at a significant power plant scale.

“We must unfortunately accept that there is currently insufficient will in German federal politics to implement the European Directive so that a CCS demonstration project in Germany could be possible”, said Tuomo Hatakka, head of Business Division Production and Vattenfall´s country manager for Germany.

In a company statement, Vattenfall emphasized that a clear legal framework is needed and that the existing draft for Germany’s CCS law is without substantial improvement insufficient for multi-billion investments in further development of this technology.

Although the announcement is bad news for CCS development in Europe, Vattenfall confirmed it will continue with further development of CCS.

The company remains a major partner in the UK’s largest CCS pilot plant at Ferrybridge power station, which became operational on 30 November. It will also continue the test operation of the CCS pilot plant at Schwarze Pumpe, Germany, and work for the development of a storage infrastructure in Europe.

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