Whitehall axe put carbon capture and storage back a decade, claim MPs

A government decision to scrap a £1bn programme to develop technology to capture and store carbon (CCS) could delay its roll out by a decade, MPs have warned.

A new report published today by the National Audit Office said the Treasury’s decision to axe its CCS Competition last November could also dramatically increase the cost of meeting this country’s 2050 carbon emission targets.

The report found while neither the Treasury nor the Department for Energy and Climate Change (DECC) had quantified the cost of delaying the large-scale deployment of CCS, DECC had warned the Treasury during the Spending Review that without CCS the cost of meeting the 2050 targets would increase by an additional £30bn.

The chair of the environment audit committee, which commissioned the report, Mary Creagh, said the government’s decision to axe the competition could have ‘delayed the roll out of this crucial technology for a decade or more’.

‘It is critical that government establish a new strategy for supporting large-scale deployment of CCS, as without it, the eventual bill for cutting our carbon emissions could be up to £30bn more.’

The NAO report also found that before the Spending Review was published, official forecasts already showed the government was set to miss its 2025 carbon reduction target by around 10%.

‘There is a gap between our stated ambitions on climate change and the policies and spending the government is bringing forward to get us there,’ added Ms Creagh.

Government must now move forward and urgently develop a new and improved approach to CCS that delivers this essential low-carbon infrastructure for the UK economy – Luke Warren, Carbon Capture and Storage Association

The £1bn competition was launched by the-then coalition government in April 2012 to encourage the design, construction and operation of full-scale CCS projects in the UK.

But in a short statement to the stock exchange in November, the Treasury said the ring-fenced capital budget was no longer available and the competition would not proceed any further.

Chief executive of the Carbon Capture and Storage Association (CCSA), Luke Warren, said the NAO report ‘unequivocally shows’ the full costs and impact of delaying CCS technology were not adequately considered in the run up to the decision to end the competition.

‘Whilst HM Treasury judged that the competition was aiming to deliver CCS before it was cost efficient to do so, the Energy Technologies Institute has shown that a 10-year delay to CCS could add an additional £1-2bn to consumers’ bills every year throughout the 2020s.

‘Despite the cancellation of the CCS competition, industry in the UK stands ready to deliver and the government must now move forward and urgently develop a new and improved approach to CCS that delivers this essential low-carbon infrastructure for the UK economy – recognising the wider benefits of CCS to decarbonise energy intensive industries, power, heat and hydrogen,’ added Dr Warren.

A government spokesperson said: ‘We are committed to meeting our climate change targets in a way that is affordable and provides secure energy to our families and businesses.

‘We haven’t closed the door to CCS in the UK, but we are clear that it needs to come down in cost and are considering the role that it could play in long-term decarbonisation.’

A spokesperson for Shell said: ‘We were disappointed that the UK government withdrew its funding for the CCS Competition, for which Shell’s Peterhead project was one of the contenders.

‘Without government funding the conditions are not right for rolling out the technology in an economically viable way. We remain committed to CCS and view it as a key technology in a low-carbon future, as evidenced through our involvement in the Quest CCS project in Canada and a number of other CCS projects around the globe, including a research project at Imperial College in London.’

Photo by Darren Flinders