The UK cannot “credibly” reduce greenhouse gas emissions to net zero without the widespread use of carbon capture technology but government support for the fledgling industry has been “turbulent”, a report from MPs has concluded.
Current policies on carbon capture are “so broad as to be meaningless”, the business, energy and industrial strategy select committee said, as it urged ministers to set a “clear” direction for the technology, which is “necessary” to meet both national and international climate change targets.
Their report comes a week before the government’s official advisers on climate change present their opinion on whether the UK should adopt a net zero emissions target as part of its climate change goals, compared with the current legally binding target of a reduction of at least 80 per cent by 2050 from 1990 levels.
Technology that captures carbon dioxide emissions from factories and power plants for it to either be reused, for example in fizzy drinks, or stored in depleted oil and gasfields under the sea has long been considered by scientists, industry and policymakers as a potentially crucial tool in helping to stem climate change. But the UK has yet to develop a commercial-scale project.
Government subsidy auctions, in 2007 and 2012, to develop projects were later cancelled amid concerns over costs.
Last year, the government reiterated its support for carbon capture usage and storage (CCUS) and committed £20m of funds towards designing and constructing demonstration plants.
But the government’s stated ambition to have “the option to deploy CCUS at scale during the 2030s, subject to costs coming down sufficiently”, did not indicate a commitment commensurate “with the importance of this technology”, the committee said.
The ambition’s “lack of clarity” was posing “difficulty” for investors, the committee added.
Plans to develop carbon capture schemes at fossil fuel power stations have always suffered from unflattering cost comparisons with low carbon electricity generation. For example in 2012, it was estimated that proposed power plants with carbon capture schemes would require government subsidy contracts with a “strike price” — a guaranteed price per unit of electricity — of £170 per megawatt hour.
This compares with the £92.50/MWh guaranteed price awarded to the Hinkley Point C nuclear power station under construction in Somerset, which is in itself considered expensive when compared with recent contracts awarded to offshore wind farms. More recent projections for carbon capture projects at power plants have reduced to £80-90/MWh, although this is still more expensive than offshore wind.
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When considering the costs of CCUS, however, the government must also weigh up the wider benefits, the select committee said. For example, heavy industries that are big emitters of carbon dioxide would otherwise need to close to meet climate change targets, the report stated, without naming any particular sector.
“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,” said Anna Turley, Labour MP for Redcar and a member of the select committee.
“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,” she added.
The committee has recommended that the government revise its ambition to developing projects “at least cost”, rather than being subject to costs reducing “sufficiently”, and to also develop CCUS projects in at least three areas of the country by 2025.
A BEIS spokesperson said: “We are pleased that the committee shares our believe that CCUS can play an important role in meeting our climate targets.”
“Our Carbon Capture Action Plan shows we are ready to rise to the challenge of tackling climate change while kickstarting a new industrial opportunity as we aim deploy the first CCUS facility in the UK from the mid-2020s and roll out the technology at scale by the 2030s,” the spokesperson added.
