UK government critised for squandering £30m on CCS projects
The UK government has come under criticism from the Labour party for its failures in the carbon capture and storage scheme, a programme that could have played a part in beating climate change. Shadow energy minister Clive Lewis has accused the government of 'pouring cash down the drain', having spent more than £230m on CCS since 2011 without building a sequestration plant. The government continues to spend on the programme despite abandoning it, a decision, which alongside other energy policy reversals, has seen investors seek a risk premium for investing in the UK energy market, raising prices unilaterally.

The government has handed out almost £30m to Shell and other companies for work on carbon capture and storage (CCS) despite scrapping their projects that could have played a role in beating climate change.

The payments, revealed in a written parliamentary answer, come as the UK government is about to host the international Carbon Sequestration Leadership Forum even though it has just mothballed a £1bn CCS research programme.

It also means that more than £230m has been spent on CCS since 2011 but no working sequestration plants have been built.

About £26m of additional cash has been paid for early engineering work for the now abandoned White Rose scheme in Yorkshire originally led by the power company Drax, and a further £3m for the scrapped scheme at Peterhead in north-east Scotland, in which Shell was involved.



Labour accused the Conservative government of pouring cash down the drain in what was described as a series of U-turns on energy policy since the Tories won the general election last year.



“The government has given nearly £30m to the companies who were bidding for the original CCS competition, without getting anything in return due to the chancellor’s decision to abruptly abandon the whole programme,” said the shadow energy minister Clive Lewis MP.

“Any technological advances that were made in the early stages are now set to benefit other countries that are investing in carbon capture and storage, and the taxpayer will have quite literally spent money for nothing.



“It simply makes no sense either economically or environmentally to abandon these projects that would have helped us both save jobs and save the planet.

“The government’s record of sudden and unjustified energy policy reversals is exactly why investors are now seeking a risk-premium for investing in the UK energy market, meaning higher bills for everyone.”

The National Audit Office is already investigating the way CCS has been handled but a spokesperson for the Department of Energy and Climate change said the latest tranche of cash to Shell and Drax was necessary and the knowledge could be put to good use.

“This is money that was already committed to these CCS projects through their respective contracts with government.

“We haven’t closed the door on CCS but we are clear that it needs to come down in cost. By sharing key knowledge now, we are supporting the long-term development of the industry and helping reduce the costs of CCS, which currently remain too high.”

The White Rose and Peterhead projects were competing to win a larger £1bn prize to build the first commercial CCS scheme in Britain. The money was pledged in the Conservatives’ 2015 election manifesto.

But the UK has also considered earlier CCS schemes – now scrapped – proposed for capturing carbon at the now closed Longannet coal-fired power station in Scotland and Kingsnorth in Kent.

John Allott, a national officer for construction with the Unite union, said it was a wasted opportunity as much as a waste of cash.



“Coal is a crucial bridge to a low-carbon economy. With commercially deployable CCS, coal can be, and should be, part of that low-carbon energy generation mix beyond 2025. The Treasury raid on the £1bn CCS R&D budget in November 2015 was unexpected and in our view extremely short-sighted.

“It would be a missed opportunity if the first industrialised country [the UK] is not the first country in the world to adopt commercial scale CCS. If we did, we would be able to demonstrate to the emerging economies that coal can play a part in their development but in a responsible and environmentally friendly way.”

