BEIS Committee slams government's 'turbulent' policy support for carbon capture, storage and utilisation (CCUS) technologies
Wide deployment of carbon capture systems is crucial if the UK is to achieve a net zero emission economy and boost its ailing productivity, a group of MPs warned today.
But the Business, Energy and Industrial Strategy (BEIS) Committee argued that far from prioritising the strategically crucial sector, the government had hampered the development of the UK's CCS sector through 15 years of "turbulent" policy.
The committee today published its long-awaited report on the prospects for carbon capture, utilisation and storage (CCUS) technologies in the UK and called on the government to set a much clearer policy direction to support the rapid development of the sector, arguing that a failure to do could badly undermine national decarbonisation efforts.
The Committee said there was a lack of clarity surrounding the government's ambitions for CCUS technologies, which aim to capture waste CO2 from industries before either storing the gas or finding secondary uses for it.
It highlighted past decisions from the government to cancel two major carbon capture development competitions at late stages, which it said had undermined business and investor confidence, leading to no commercial-scale CCUS plant having yet been constructed in the UK.
UK energy firm Drax is currently piloting bioenergy carbon capture technology at its biomass plant in Yorkshire, while the government has set an ambition to deploy CCUS at scale "during the 2030s", committing £170m towards developing a cluster of net zero heavy industrial plants by 2040.
Last month the government also threw £1m funding behind a new industry group to advise on bringing CCUS to scale in the UK, with members including Drax, BP, Shell, Tata Steel, National Grid, and Cadent.
However, today's report said the government's 2030s CCUS ambition was "so broad as to be meaningless", and stressed that a failure to fully deploy CCUS at scale could double the cost of meeting statutory UK climate change targets, rising from approximately one per cent of annual GDP today to around two percent in 2050.
Moreover, without CCUS the UK could not credibly adopt a net zero emissions target in line with limiting global warming to 1.5C. The government is expected to face vocal calls to set a net zero target next week, when the Committee on Climate Change offers its hotly anticipated advice on the feasibility of strengthening the UK's long term emissions goals.
BEIS Committee member Anna Turley, Labour MP for Redcar, said the UK had an opportunity to lead the world in the development of a new CCUS industry, which could deliver much need investment in UK regional skills and infrastructure, as well as being the "best and most cost-effective way to reduce our carbon emissions".
"The government now needs to give the 'green-light' to CCUS and ensure that we seize the domestic growth and jobs opportunities of this modern, green industry," she said. "CCUS is crucial to meeting the UK's climate change targets and will be vital to achieving a ‘net zero' target."
Without government support for CCUS, Turley warned many of the UK's heavy industries could face closure. "The Treasury needs to shake off the blinkers in its attitude to CCUS, take a more nuanced approach to the costs but also recognise the benefits," she said. "CCUS has a critical role to play in decarbonising our economy and modernising UK industry - the government should now throw its full support behind CCUS and put the right policy levers in place to ensure that this technology can deliver on its potential."
The government has set a target to commission the first CCUS facility by the mid-2020s, identifying five potential clusters in Teesside, Humberside, South Wales, and North East Scotland.
But the Committee recommended the government raise its goal and look to develop CCUS at least three of the proposed clusters by 2025. It added that as such as the forthcoming Whitehall Spending Review should take account of not only the upfront costs of carbon capture, but also the wider lifetime economic benefits.
Responding to today's MP report, BEIS said CCUS "can play an important role in meeting our climate targets" and reiterated its investment in the technology and commitment to decarbonising UK industry.
"Our Carbon Capture Action Plan shows we are ready to rise to the challenge of tackling climate change while kickstarting a new industrial opportunity as we aim deploy the first CCUS facility in the UK from the mid-2020s and roll out the technology at scale by the 2030s," the department said in a statement.
But with the fledgling industry still yet to fully recover from the previous policy and funding reversals and investors unclear precisely how quickly the sector will be allowed to scale, MPs are not the only ones urging Ministers to provide greater clarity on their plans for this most important of technologies.
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