Government’s backing of unproven, first-of-a-kind technology to reach net zero is high-risk. In a report published today, the Public Accounts Committee (PAC) calls on Government to assess whether its full carbon capture, usage and storage (CCUS) programme will be affordable for taxpayers and consumers, given wider pressures on energy bills and the cost of living. 

CCUS sees the capture and storage underground of carbon before it is released into the atmosphere and is viewed by the Government as essential to its legally mandated net zero by 2050 goals. There are no examples of CCUS technology operating at scale in the UK. The PAC’s inquiry heard that CCUS may not capture as much carbon as expected, with international examples showing that Government’s expectations for its performance are far from guaranteed.  

The report notes recent scientific evidence that producing liquid natural gas, which will be used to run several CCUS projects, leaks more greenhouse gases into the atmosphere than previously thought. This could undermine the rationale for pursuing certain schemes, and the PAC calls on Government to consider the impact of up-to-date scientific understanding on CCUS. 

The report finds that Government has learnt from previous failed attempts to support CCUS, with the first two projects expected to begin operating in 2028.  It notes that three-quarters of the almost-£22bn envisaged to support the projects will come from levies on consumers who are already facing some of the highest energy bills in the world. But the report finds the Government has not yet looked at the likely financial impact of CCUS on households. 

The PAC’s inquiry further found that neither of the contracts for the two new CCUS projects include any provision for the Government to share the profits or for consumers to benefit from lower energy bills should things go well. This is despite any such profits, which could be significant if the programme is successful, being a result of early public support. The report calls on Government to introduce mechanisms to make sure taxpayers and consumers benefit financially from the success of all future CCUS projects that they have supported.  

The Government downgraded its ambitions for CCUS in 2024, with a target of storing 20 to 30 million tonnes per year of CO2 by 2030 now seen as no longer achievable. No revised targets have yet been announced. The PAC’s report notes that this creates a shortfall in Government’s pathway to net zero, with the now-abandoned targets leaving it unclear how the Government will meet its legally binding goals. The PAC’s report calls for new targets to be set out as a matter of urgency. 

Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: 
“Government is gambling on carbon capture technology becoming foundational to achieving net zero. In this context, it is welcome to see Government learning lessons from past failures to grow these programmes by working with clusters of projects that can support each other. It must now ensure that it has not sown the seeds of its own failure with this approach by making sure that it can direct support to sectors or locations outside of these clusters. This £21.7bn policy is going to have a very significant effect on consumers and industry’s electricity bills. Whether this is acceptable remains to be seen. 

“As we are currently in the foothills of CCUS’ development into a fully functioning industry, the Government must remain alive to recent scientific evidence to adapt its approach. All early progress will be underwritten by taxpayers, who currently do not stand to benefit if these projects are successful. Any private sector funding for such a project would expect to see significant returns when it becomes a success. We were surprised that the Government had not even considered this aspect. Most concerningly, last year’s downgrading of ambitions for CCUS has left a glaring shortfall in the path to net zero. While our Committee was left unconvinced that CCUS is the silver bullet Government is apparently betting on, we hope the recommendations in our report will help support the programme to become the success Government and the public need it to be.” 

KeyFacts Energy news: Carbon Capture and Storage