Written by Kira Scharwey, Senior Account Manager, Madano Energy Practice
Based on the rollercoaster of Government policy on Carbon Capture and Storage in the past years, it’s easy to remain cynical about when or if we will actually see some progress in the UK on the much-needed technology.
So I was pleased to see the Public Accounts Committee’s report published today, which recommends that Government should set out in its Industrial Strategy the role that CCS can play, recognising the potential economic value of being a world leader in a globally expanding technology.
The report warns that halting CCS deployment means taxpayers will have to pay billions more to meet decarbonisation targets, the UK will miss opportunities to be at the forefront of a growing global industry, and investors’ confidence in working with the Government on CCS in the future has been damaged.
This is not new information to those familiar with the industry, and is merely the latest in a stream of parliamentary and independent recommendations on the necessity of CCS since the previous power CCS competition was cancelled in late 2015:
- Lord Oxburgh’s Parliamentary Advisory Group’s report on CCS found that CCS is “essential for lowest cost decarbonisation”
- The former Energy and Climate Change Select Committee made recommendations around the need for a clear, long-term policy on CCS to enhance investor confidence in the industry
- The Committee on Climate Change has said that CCS is “of critical importance to meet the UK’s carbon targets at least cost and to fulfil the ambition of the Paris Agreement”
While I appreciate that there are many competing priorities for Government expenditure, CCS needs to be looked at in the bigger picture, as part of long-term policy that can benefit the UK in more ways than decarbonisation. It should not just be seen as an environmental cost to the UK – it is an investment opportunity that could see significant economic benefits in the same way as other new technologies.
The PAC’s report states there is a risk the UK will now miss out on the chance to lead the way in CCS, much as it did with wind power in the 1980s.
In the context of Brexit, it’s more important than ever to retain our competitiveness with Europe and the rest of the world. For example:
- UK industry will struggle to remain competitive in a carbon-constrained world without CCS infrastructure to decarbonise industrial clusters, and we could see foreign-owned companies relocating to Europe and other places where it’s easier to do business. CCS could be a national strategic asset for the UK, supporting the long-term sustainability of industry.
- Having CCS in place provides optionality for further policy decisions the Government might want to make including decarbonising heat and transport with hydrogen, which is not possible without CCS infrastructure.
There have definitely been lessons learnt from the approach taken with previous power competitions, and we are now better-placed to deliver CCS at a lower cost. So I particularly welcome the timing of the PAC’s recommendations in advance of the publication of the Government’s Clean Growth Plan (formerly Emissions Reduction Plan) this year.
While BEIS has remained very supportive of CCS since the cancellation of the previous power competition, ultimately it will be up to Treasury and No 10 to approve any policy direction in the Clean Growth Plan. Competing priorities could impact CCS’ positioning and there is a real risk that there could be a lack of commitment.
With CCS, Government could unlock billions of pounds of clean growth and development in the future. But we have a limited window of opportunity to make the most of it. In the wake of Brexit, and given our climate change commitments, Government would be missing an opportunity by not supporting the commercialisation of CCS.
Madano works with Teesside Collective, an industrial CCS project in the North East of England.