UK government should ‘green light’ carbon capture technology, say MPs

The UK government needs to move away from vague and ambiguous targets and give a clear policy direction to ensure the UK seizes the industrial and decarbonisation benefits of carbon capture usage and storage (CCUS), says the Business, Energy and Industrial Strategy (BEIS) Committee in a report published on 24 April 2019.

Entitled Carbon capture usage and storage: Third time lucky?, the report says CCUS is necessary to meet national and international climate change targets at least cost and argues the technology could play a significant role in supporting productivity growth outside London and the South East.

Turbulent policy support
The UK is considered to have one of the most favourable environments globally for CCUS, but the technology has suffered from 15 years of turbulent policy support, including the cancellation of two major competitions at a late stage. No commercial-scale plant has yet been constructed in the UK.

CCUS is a set of technologies which can together capture carbon dioxide (CO₂) from waste gases, and either ‘lock up’ this CO₂ in long-term storage or use it in industrial processes.

The report notes that in the UK, failure to deploy CCUS could double the cost of meeting the country’s targets under the Climate Change Act 2008, rising from approximately 1% to 2% of GDP per annum in 2050.

Failure to deploy CCUS would also mean the UK could not credibly adopt a ‘net zero emissions’ target in line with the Paris Agreement’s 1.5°C aspiration. This latter target is a more ambitious policy on which the Committee on Climate Change will set out next on 2 May whether the government should commit to a net-zero target and the date to achieve it.

The report recognises the Energy Minister’s personal commitment and support for CCUS but finds there is a lack of clarity concerning the government’s ambitions for CCUS, both in terms of time-scale for deployment of CCUS and the level of costs reductions the government is demanding from the technology before it gives it support.

Comments
Anna Turley, Labour MP for Redcar and Member of the Business, Energy and Industrial Strategy Committee, says: ‘The UK has an opportunity to lead the world in the development of a new CCUS industry. In addition to helping to tackle UK carbon emissions, CCUS can play a crucial role in delivering much needed investment in skills and infrastructure and supporting regional growth and jobs.’

‘The current Energy Minister has been a champion for CCUS, and there have been some encouraging recent developments, but the CCUS industry has been the victim of years of turbulent policy support and suffered a series of false dawns. The government now needs to give the “green-light” to CCUS and ensure that we seize the domestic growth and jobs opportunities of this modern, green industry.’

She continues: ‘CCUS is crucial to meeting the UK’s climate change targets and will be vital to achieving a “net zero” target. But government support is needed to make CCUS a reality. The Treasury needs to shake off the blinkers in its attitude to CCUS, take a more nuanced approach to the costs but also recognise the benefits. CCUS is the best and most cost-effective way to reduce our carbon emissions. Without CCUS many of our heavy industries could face closure. CCUS has a critical role to play in decarbonising our economy and modernising UK industry – the government should now throw its full support behind CCUS and put the right policy levers in place to ensure that this technology can deliver on its potential.’

Stuart Haszeldine, Professor of CCS at the University of Edinburgh and SCCS Director, echoes these sentiments: ‘We strongly welcome the Committee’s report, and urge the government to act on its recommendations. We are pleased to see the Committee focusing on the “how” rather than the “why” of CCS. It has been shown time and again that CCS is not just the lowest cost way of decarbonising the UK economy. It will be essential if the world is to achieve the climate ambitions of the Paris Agreement.’

‘There are five potential CCUS clusters of high-emitting industries, which want to reduce their emissions by capturing and permanently storing the CO₂ they emit. Each cluster has different and complementary strengths, and the UK government needs to support them to collaborate, not pit them against each other in a competitive arena.’

‘There is still the question of how development of carbon storage will be paid for, and how networks of networks of pipes to transport the CO₂ will be funded. It’s clear that a new business needs to be created, with CO₂ as its subject.’

He concludes: ‘The appetite for rapid change to tackle CO₂ emissions is clear, but the vagueness of government policy, and the lack of dedicated funding for CCS, continues to act as a brake on these ambitions. We could be well on our way to decarbonising the whole economy in 2023, if the UK government takes the Committee’s recommendations on board.'

Call for clarity
Rather than seeking unspecified cost reductions, the report says the government should kick-start CCUS by aiming to bring forwards projects at least cost. The report also says the ambition to ‘deploy CCUS at scale during the 2030s’ is so broad as to be meaningless, recommending the government provide clarity by adopting specific targets in line with the Committee on Climate Change's recommendation [see paragraph 16 of the report].

The government has set a target to commission the first CCUS facility by the mid-2020s. Five clusters – Teesside, Humberside, Merseyside, South Wales, North East Scotland – have been identified as well suited to early CCUS deployment. The report recommends this ambition is raised to target the development of first CCUS projects in at least three clusters by 2025.

The report also recommends that the government consider an alternative to running a third competition for funding and urgently consult on approaches to allocate funding for CCUS industry clusters, to ensure that the approach selected promotes collaboration and benefits CCUS development across the UK.

Wider benefits
The report recommends that the forthcoming Comprehensive Spending Review take account not only of CCUS’ costs, but also its wider benefits – notably to extend the lifetime of heavy industries which will otherwise need to close under the requirements of the Climate Change Act. The Committee also recommends the government task the National Instructure Commission – or a third party – to conduct a cost benefit analysis of the potential role of CCUS to decarbonise industrial emissions and that the results of this assessment should be taken into account during decision-making on spending for national infrastructure.

The report recognises CCUS as a particularly useful technology in tackling carbon emissions, with its potential application to many different areas of the economy. For example, carbon capture technology can decarbonise waste gases from power stations and industrial facilities; help to produce clean hydrogen fuel from natural gas; and remove greenhouse gas emissions from the atmosphere via bioenergy with CCS (BECCS) or direct air CCS (DACCS). 

See Petroleum Review’s forthcoming May 2019 issue for more on Norway’s CCS developments.