The UK government’s recent announcement regarding carbon capture, utilisation and storage (CCUS) has drawn criticism from the Institute for Energy Economics and Financial Analysis (IEEFA).
According to IEEFA, the plans contain potentially misleading claims that overlook the costly, complex and risky nature of CCUS technologies, which have a history of underperformance and delays.
Announced on 4th October, the UK government confirmed plans to establish carbon capture sites in Teesside and Merseyside, set to create 4,000 jobs and attract £8 billion ($10.3bn) in private investment.
This initiative aims to enhance the UK’s clean energy capabilities while supporting local economies and contributing to Net Zero targets by capturing over 8.5 million tonnes of carbon emissions annually, states the government.
Arjun Flora, Director for Europe at IEEFA, noted that this initiative could inadvertently deepen the UK’s reliance on fossil gas imports for decades.
“At a time of increasing global instability, this approach risks locking the UK into a pathway that hinders genuine progress towards decarbonisation,” he said. The announcement is seen as unlikely to yield substantial benefits per taxpayer pound, raising concerns about its efficacy in stimulating authentic green economic growth.
The IEEFA argues that the UK should redirect its resources toward technologies with established decarbonisation credentials. “Investing in proven solutions like building insulation, renewable power, heat pumps, electric vehicles, and enhanced public transport systems will deliver far more immediate benefits,” added Flora.
Instead, he criticised the government’s continued support for hydrogen derived from fossil gas, labelling it ‘blue’ or ‘clean’ hydrogen, despite its high costs and the uncertainties surrounding future demand.
Flora pointed out that while major fossil fuel players like BP and Equinor may benefit from the government’s stance, the broader implications for taxpayers could be detrimental. “This policy not only fails to advance the UK’s decarbonisation goals but also sends the wrong signal internationally about the need to halt the expansion of fossil fuel infrastructure,” he said.
One of the most troubling aspects of the CCUS strategy is its failure to address the significant upstream emissions associated with natural gas, according to Flora.
“The carbon capture processes do nothing to mitigate the substantial methane emissions released before the gas reaches the combustion site.”
The IEEFA also warns that CCUS technologies cannot guarantee the complete elimination of on-site emissions. While industry targets aim for capture rates of 95% or higher, the organisation’s findings reveal a troubling history of underperformance.
Flora also revealed that many projects have struggled to achieve even 80% capture, with some recording results as low as 10%, suggesting that operational subsidies be contingent upon demonstrable performance.
He also expressed scepticism regarding the safety of long-term carbon storage under the seabed, countering government claims of its reliability.
“While some limited success has been achieved in Norway, the complexity and long-term liabilities associated with CO2 storage present significant risks,” he warned. Reports of potential leaks from storage sites in the US underscore the uncertainties surrounding this technology.
The IEEFA also highlights the need to distinguish between different applications of CCUS, as they possess varying levels of maturity, costs, and emissions mitigation potential. “Conflating these diverse uses creates a misleading narrative of simplicity and readiness, obscuring the real risks and liabilities that will ultimately fall to taxpayers,” said Flora.
Investing in solutions
Despite the criticism of CCUS, proponents argue that it is essential for achieving Net Zero emissions while allowing continued use of fossil fuels during the transition.
According to the International Energy Agency, to reach Net Zero by 2050, global CCUS capacity needs to increase from about 40 million tonnes per year in 2020 to over 1.7 billion tonnes annually. This technology can be pivotal in decarbonising hard-to-abate sectors, such as cement and steel production.
The UK government’s investments in ‘proven solutions’ include the £1 billion ($1.3bn) Green Homes Grant scheme, which aims to improve energy efficiency through insulation in over 600,000 homes.
Additionally, the £500 million ($649m) announced for electric vehicle infrastructure will support the rollout of charging points nationwide, while projects like the Hornsea One offshore wind farm are set to provide over 1.2 GW (gigawatts) of renewable energy.
