The government’s decision to pull funding for carbon capture and storage (CCS) will delay the technology’s deployment in the UK and could prevent the UK meeting climate change commitments agreed at the Paris COP21 summit, the Energy and Climate Change Committee has warned.

Angus MacNeil, Energy and Climate Change Committee chair said:  “If the Government is committed to the climate change pledges made in Paris, it cannot afford to sit back and simply wait and see if CCS will be deployed when it is needed. Getting the infrastructure in place takes time and the Government needs to ensure that we can start fitting gas fired power stations with carbon capture and storage technology in the 2020s.”

MacNeil added that the way the government had pulled the funding without prior warning – at a late stage in the bidding process – was part of a series of decisions that had damaged investor confidence in UK energy:  “The manner in which the government pulled the plug on the CCS commercialisation competition was hugely disappointing. UK companies had been working towards this for years and were only weeks away from final proposals. The first hint one company had about the decision was when they read a news report the night before. This is the latest in a series of snap decisions that have damaged confidence in the government’s energy policy.”

The report also warns that the government may have lost an opportunity to exploit existing oil and gas assets in the North Sea, which could have generated additional revenues. The MPs are calling on the Department for Energy and Climate Change to assess the benefits of using existing North Sea infrastructure for commercial scale CCS.

The report was welcomed by the Carbon Capture and Storage Association (CCSA).  Luke Warren, the association’s chief executive, commented: “The Spending Review decision to withdraw funding for CCS has had an extremely negative impact on the industry. What may have seemed like a good short-term saving risks loading significant costs onto the UK economy in the longer-term as the cost of meeting decarbonisation goals will increase substantially if CCS is not available.”

Read the full report: Future of carbon capture and storage in the UK

From the New Power archive: Government’s last-minute decision on CCS puts a cloud on all UK investment

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