The UK is backing carbon capture, usage and storage (CCUS) projects with billions but needs to make sure taxpayers and consumers benefit financially from the success of the projects they have supported, according to a report from an influential committee of MPs who also said the government must also be clearer about how much carbon will actually be captured.
Carbon capture, usage and storage (CCUS) technologies aim to capture carbon and either store it permanently underground or reuse it to create new chemicals and products. Reducing the levels of carbon dioxide in the atmosphere is seen as a key element of tackling climate change.
Previous governments have attempted to launch CCUS in the UK twice before, but these projects were cancelled in 2011 and 2016. The current approach, launched in 2018, aims to establish CCUS in geographical clusters and will be funded with £21.7 billion over 25 years to cover the first five projects.
But in a new report Carbon Capture, Usage and Storage Eighth Report of Session 2024-25, the House of Commons Public Accounts Committee warned that the the government’s backing of an "unproven, first-of-a-kind technology" to reach net-zero is "high-risk.”
The Committee said that three-quarters of the funding to support the investment will come from levies on consumers who are already facing some of the highest energy bills in the world. The report also finds that the government has yet to consider the likely financial impact of CCUS on households.
“Government is gambling on carbon capture technology becoming foundational to achieving net zero," said Sir Geoffrey Clifton-Brown MP, chair of the committee. "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," he said.
The PAC highlighted that under the current contractual agreements for the two new CCUS projects, neither include any provision for the government to share the profits, or for consumers to benefit from lower energy bills should things go well: the committee called on government to introduce mechanisms to ensure taxpayers and consumers benefit financially from the success of all future CCUS projects that they have supported.
The report did welcome the government's decision to implement its planned investment through ‘clusters’, as well as the development a new approach to managing risks between emitter projects and transport and storage companies. But it warned that there was a lack clarity on how it would take account of project underperformance and advances in scientific understanding as part of the ongoing assessment of the programme’s future.
“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,” Clifton-Brown added.
The PAC report noted that in December 2024, the government concluded that its target to capture 20 to 30 million tonnes of CO2 annually by 2030 will not be met. Since then the government has not yet announced revised targets, even though these ambitions were aligned with its plans to meet the decarbonisation goals for Carbon Budget 6.
"The department should set out, as a matter of urgency, new targets for how much carbon it intends to capture through its CCUS programme and by when, and make clear how it will make up the shortfall created in its overall net zero pathway," the report said.
Professor Stuart Haszeldine of the School of GeoSciences at the University of Edinburgh and Scottish Carbon Capture and Storage said the PAC’s report failed to highlight the positive benefits of the projects.
“CCS projects examined by the PAC have evolved from first attempts to construct simple ‘vertically integrated’ projects from an emissions source to a storage site. These were too expensive because capture, pipeline transport, and geological storage infrastructure was built around a single project. The projects examined by PAC are clusters of multiple industries where several sources of CO2 can be combined and sent offshore for geological storage – using shared pipelines and large storage sites. That decreases costs but requires much greater planning and coordination by government. These are amongst the most complex engineering projects ever built in the UK.” Haszeldine noted.
The Carbon Capture and Storage Association (CCSA), while welcoming the report also expressed its concern that the committee had not fully accounted for expert advice from the IPCC and the Climate Change Committee, both of which have stated that CCUS is essential to achieving net zero.
CCSA CEO Olivia Powis said: “Whilst we fully support the committee’s recommendations for updated targets for capture and storage, and in assessing value for money, it is extremely disappointing that the committee has not taken onboard expert advice on delivering against our Carbon Budgets and securing our leadership in tackling climate change by successfully delivering first-of-a kind-projects in UK.”
“The government has recently committed to 81% emissions reduction by 2035, alongside Clean Power by 2030, and net zero by 2050. Meeting these goals requires CCUS. Without it, British industries will not be able to decarbonise their operations and products, and our power system will not have low carbon dispatchable power,” Powis added.
The push to decarbonise without deindustrialisation has become central to drive for economic growth in the UK and the European Union. At the end of 2024 more the 30 MEPs signed a letter calling for Ursula von der Leyen President European Commission to rapidly deploy carbon capture and storage (CCS) and carbon capture and utilisation (CCU) technologies. This is a measure the signatories say is essential to ensure the competitiveness of European industries and to meet climate neutrality by 2050.
Further reading:
• Carbon capture and storage: This major CCS project just got the green light
• IEA database indicates that the pace of CCUS deployment is increasing
• Carbon capture and storage: Opportunities and challenges ahead
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