MPs have criticised the government in a report on its investment in carbon capture projects, saying there is a “high degree of uncertainty” whether the “risky” investment of £21.7bn in the “unproven technologies” would provide value for money for taxpayers.
The cross-party Public Accounts Committee also said the rationale behind the government investing in a carbon capture and storage (CCS) project in Teesside could be “undermined” by upstream emissions of methane in the supply chain for liquefied natural gas (LNG).
Agreements were signed in December between the government and Net Zero Teesside – a joint venture between BP and Equinor to build a gas-fired power station on the site of the former Redcar steelworks, on land which is part of the Teesworks estate.
It is hoped the project will support 2,000 construction jobs and will be operational by 2028.
However, the committee’s report on carbon capture, utilisation and storage (CCUS) says “some recent scientific evidence suggests that producing LNG (which will be used to run several CCUS projects such as Net Zero Teesside) leaks more methane, a potent greenhouse gas, into the atmosphere than previously thought.
“As CCUS will not reduce these ‘upstream’ emissions, this could undermine the rationale for pursuing certain projects.”
Emissions of methane from burning LNG at Net Zero Teesside are planned to be captured at source and stored beneath the North Sea by the Northern Endurance Partnership, a joint venture between BP, Equinor and Total.
Despite this, the committee points to research that shows higher levels of methane leakage during the liquification process of LNG than were previously recognised.
Hartlepool MP Jonathan Brash told Energy Voice: “The time for timidity, for delay, for being followers on a world stage is over under this Labour government.”
He said: “As a country we should reflect on our history and heritage when it comes to innovation and industry. We led the world and we did it by being the first to invest in cutting-edge technology, showing the courage to take a risk and in so doing deliver for the country.
“The next industrial revolution is here and Britain can lead it by investing in new industries and technologies in our post-industrial heartlands like Teesside, which will bring jobs and growth for generations to come. Our region can be the beating heart of the British economy once more.”
Equinor announced this week it was halving investment in renewable energy while increasing oil and gas production, while the committee’s report raises concerns about the government telling it that it no longer considers its target of capturing 20-30 mtpa of CO2 by 2030 as achievable. The government will announce a new target for CCUS in its Carbon Budget Delivery Plan, which is due in the spring.
Committee recommendations
The committee’s report makes six recommendations for the Department of Energy Security and Net Zero (DESNZ), including setting a new target for how much carbon it aims to capture, “as a matter of urgency.”
In another recommendation, it says the Treasury “should assess whether the full CCUS programme will be affordable for taxpayers and consumers,” while another says DESNZ should introduce mechanisms on future CCUS projects “to make sure taxpayers and consumers benefit financially from the success of the projects they have supported financially.”
In a statement to Energy Voice, a DESNZ spokesperson said: “Carbon capture, usage and storage is vital to boost our energy independence, and the Climate Change Committee describes it as a ‘necessity not an option’ for reaching our climate goals.
“There is no route to protecting jobs in our industrial heartlands and securing the future of heavy industry in the UK without it.
“This funding will see our industries remain competitive in the global economy, kickstart growth and lead the world in a ground-breaking clean energy technology.”
Committee chair Sir Geoffrey Clifton-Brown MP said: “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.”
He added: “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.
“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.”
