The UK government’s £22bn commitment to Carbon Capture, Utilisation and Storage (CCUS) is raising concerns over potential impacts on household energy bills. MPs and experts are questioning the sustainability of the funding model and its long-term benefits to consumers.
The UK government has committed nearly £22 billion towards an “unproven” green technology designed to capture and store planet-warming carbon emissions, but MPs are raising concerns that the decision could significantly impact consumers’ bills.
Carbon Capture, Utilisation, and Storage (CCUS) is a technology aimed at preventing the release of carbon dioxide (CO2) produced by industrial activities into the atmosphere by capturing and storing it underground. As part of its commitment to tackling climate change, the government allocated substantial funding for this technology, with nearly three-quarters of the cost expected to be passed on to consumers through higher energy bills.
In October, the government announced it would invest £21.7 billion in CCUS, with the funds earmarked to help build facilities in regions like Merseyside and Teesside. However, on Friday, the House of Commons’ Public Accounts Committee expressed concerns that the government had failed to properly evaluate the financial impact of this ambitious project on household and business electricity bills.
Sir Geoffrey Clifton-Brown, chair of the Public Accounts Committee, highlighted the uncertainty surrounding the technology, noting, “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.”
Despite the concerns raised, Ed Miliband, the Secretary of State for Energy, defended the initiative in an interview with the BBC, acknowledging that while the technology is novel, it is crucial for achieving the UK’s long-term climate goals. He emphasized that the UK must adopt innovative solutions like CCUS to address climate change, with expert advice underscoring its necessity in reaching net-zero emissions.
The UK has set a target to achieve “net zero” greenhouse gas emissions by 2050, which means eliminating any new additions to the total amount of greenhouse gases in the atmosphere. Transitioning from fossil fuels to renewable energy sources for heating, transport, and electricity generation will contribute significantly to reducing emissions. However, the government has acknowledged that some sectors, such as cement manufacturing, will still rely on gas due to the lack of viable green alternatives. In these cases, carbon capture technologies could prevent CO2 emissions from entering the atmosphere, which is why the government has placed its bets on this emerging technology.
Both the UK’s independent climate watchdog and the UN’s climate science body, the IPCC, agree that CCUS is vital to meeting net-zero targets and avoiding the worst effects of climate change. The government aims to use carbon capture to eliminate up to 50 million tonnes of CO2 by 2050, more than 10% of the UK’s current emissions.
However, questions remain about the technology’s potential. Dr. Stuart Jenkins, a research fellow at the University of Oxford, pushed back against the characterization of CCUS as “unproven.” Although no commercial CCUS facilities exist in the UK, 45 operational sites worldwide capture around 50 million tonnes of CO2, and there are more than 700 additional facilities under development. Jenkins agrees with the Public Accounts Committee’s call for further scrutiny of the government’s financial model but defends the technology’s engineering capabilities.
The committee’s recommendation that the full impact on consumers be properly assessed came alongside an acknowledgment of the importance of government support for innovative technologies like CCUS. However, it was noted that the government had signed contracts with developers in 2022 without ensuring that taxpayers or the public would benefit from the investment, such as through lower energy bills or profit-sharing.
“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,” said Sir Geoffrey Clifton-Brown.
The government responded by claiming that the £21.7 billion funding will unlock an additional £8 billion in private sector investment over the next 25 years, which they argue will help ensure the success of CCUS projects.
Mirte Boot, co-founder of the Carbon Balance Initiative and a research associate at Oxford University, suggested a more sustainable long-term funding model. She proposed that a carbon storage mandate be placed on fossil fuel producers, requiring them to store a portion of the CO2 they emit or face financial penalties. Boot’s research suggests this approach would provide investment certainty while ensuring fairness.
The debate over the future of carbon capture technologies highlights ongoing tensions between the need for urgent climate action and the financial burden of such technologies on consumers. The success of CCUS, along with the broader energy transition, will be a key focus for policymakers as the UK works toward its 2050 net-zero target.
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