The UK government has committed £21.7 billion to carbon capture, utilization, and storage (CCUS) technology in a bid to reduce greenhouse gas emissions and reach its net-zero target by 2050. While both the UK's independent climate watchdog and the UN's climate science body, the IPCC, underscore CCUS's necessity for mitigating climate change impacts, concerns have emerged over the financial burden on consumers and the technology's effectiveness.
Currently, 45 commercial CCUS facilities worldwide capture approximately 50 million tonnes of CO2 annually. The International Energy Agency reports that over 700 facilities are in proposal or development stages globally. Despite this progress, the UK government faces criticism for its substantial investment in what some deem an "unproven" technology.
The funding, announced in October, aims to support carbon capture projects in regions like Merseyside and Teesside. The government anticipates that this investment will unlock an additional £8 billion from the private sector over the next 25 years. However, three-quarters of the funding will be sourced from consumer bills, raising concerns about the financial impact on households and businesses.
Sir Geoffrey Clifton-Brown expressed apprehension regarding the policy's impact on electricity costs, stating:
"It is an unproven technology, certainly in this country. And we are concerned this policy is going to have a very significant effect on consumers' and industry's electricity bills."
The government contends that CCUS will bolster Britain's energy security and lower electricity costs. It aims to prevent 50 million tonnes of CO2 emissions by 2050, equating to over 10% of the country's current emissions. Yet, the Public Accounts Committee has voiced serious concerns about the lack of a comprehensive financial assessment for households and businesses.
Last year, the government signed two contracts with CCUS developers without assurances of public or governmental gains should the projects succeed. This approach has drawn criticism from figures like Sir Clifton-Brown, who remarked:
"If you were a venture capitalist investing this sort of sum of money, which is effectively what the taxpayers are doing here, you would expect to have a big equity stake in this whole thing."
Mirte Boot, co-founder of Carbon Balance Initiative, suggested an alternative financing model through a carbon storage mandate. Such a mandate would legally require fossil fuel producers to store a portion of their CO2 emissions or incur financial penalties. Boot advocated for this approach, stating:
"We argue that carbon storage mandates on fossil fuel producers are fair whilst also providing the kind of investment certainty that companies need."
Dr Stuart Jenkins, a research fellow at the University of Oxford, countered doubts about CCUS technology:
"I really don't like the phrase 'unproven' technology, it is not representative of the status of the technology as an engineering problem."
He acknowledged, however, that questions persist about the government's current funding strategy.