The UK government’s backing of unproven, first-of-a-kind carbon capture technology to reach Net Zero is high risk and more work on the programme’s affordability for taxpayers and consumers is needed, according to a Public Accounts Committee (PAC) report.
With no examples of CCUS technology operating at scale in the UK, the PAC’s inquiry heard it may not capture as much carbon as expected, with international examples showing expectations for its performance are far from guaranteed.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said, “Government is gambling on carbon capture technology becoming foundational to achieving Net Zero. In this context, it is welcome to see government learning lessons from past failures to grow these programmes by working with clusters of projects that can support each other. It must now ensure that it has not sown the seeds of its own failure with this approach by making sure that it can direct support to sectors or locations outside of these clusters.”
He added that the £21.7bn funding for CCUS and hydrogen is going to have a “very significant effect” on consumers and industry’s electricity bills.
“Whether this is acceptable remains to be seen,” said Clifton-Brown. “As we are currently in the foothills of CCUS’ development into a fully functioning industry, the government must remain alive to recent scientific evidence to adapt its approach. All early progress will be underwritten by taxpayers, who currently do not stand to benefit if these projects are successful.”
The notion of future profitability merits further scrutiny. Three-quarters of funding will come from levies on consumers who are already facing some of the highest energy bills globally – yet any private sector company injecting capital would expect to see significant returns when it becomes a success.
The PAC’s inquiry further found that neither of the contracts for the two new CCUS projects include any provision for the government to share the profits or for consumers to benefit from lower energy bills should things go well.
“We were surprised that the government had not even considered this aspect. Most concerningly, last year’s downgrading of ambitions for CCUS has left a glaring shortfall in the path to Net Zero,” he said. “While our Committee was left unconvinced that CCUS is the silver bullet Government is apparently betting on, we hope the recommendations in our report will help support the programme to become the success government and the public need it to be.”
The report notes recent scientific evidence that producing liquid natural gas, which will be used to run several CCUS projects, leaks more greenhouse gases into the atmosphere than previously thought. This could undermine the rationale for pursuing certain schemes, and the PAC calls on government to consider the impact of up-to-date scientific understanding on CCUS.
The UK government downgraded its ambitions for CCUS in 2024, with a target of storing 20 to 30 million tonnes per year of CO2 by 2030 now seen as no longer achievable. No revised targets have yet been announced.
The PAC’s report notes that this creates a shortfall in the pathway to Net Zero, with the now-abandoned targets leaving it unclear how the government will meet its legally binding goals. The PAC’s report calls for new targets to be set out as a matter of urgency.
Speaking on Radio 4’s Today programme, Ed Miliband, Secretary of State for Energy and Climate Change, said, “The growth agenda and Net Zero agenda are absolutely aligned because the biggest economic opportunity of the 21st century is in clean energy … whether it’s in carbon capture and storage, or offshore wind, renewables more broadly or nuclear. The truth is that Britain is exposed to fossil fuels to our absolute detriment as a country.”
CCSA defends carbon capture potential
The Carbon Capture & Storage Association (CCSA) said carbon capture is a proven technology for over 25 years and it was ‘extremely disappointed’ that the Committee had not taken on board advice from the Intergovernmental Panel on Climate Change (IPCC) and Climate Change Committee (CCC) that CCUS is essential to achieving Net Zero.
CEO Olivia Powis said when Chris Stark, Head of Mission Control for Clean Power 2030, was in front of the Energy Security and Net Zero Select Committee yesterday, he stated that CCS will provide a meaningful contribution towards 2030 and emphasised “the enormous benefits of clean dispatchable power to the energy system”.
“The government has recently committed to 81% emissions reduction by 2035, alongside Clean Power by 2030, and Net Zero by 2050,” she said.
“Meeting these goals requires CCUS. Without it, British industries will not be able to decarbonise their operations and products, and our power system will not have low carbon dispatchable power which is essential for delivering a secure energy system when the wind isn’t blowing, and the sun isn’t shining.”
“If we are to reduce our reliance on expensive imported energy and products, and achieve long-term savings for consumers and benefits to UK PLC we must continue to move forward with these projects at pace.”
“The Committee has correctly identified that deployment is behind schedule due to government delays, but by delivering these essential projects we can unlock the huge economic opportunity that is within our grasp. CCUS could attract £20-£30bn in private investment by 2030.”
With almost one-third of Europe’s geological storage potential, the UK could have a CO2 storage sector collectively worth £30bn a year in taxable revenues by 2050.
“Government now needs to be making responsible and timely decisions to support the next clusters and projects, and deliver substantial economic benefits for the UK before the opportunities and jobs are lost, with investors and developers moving elsewhere,” Powis said.
Read more: CCSA interview with Olivia Powis (page 52, November issue)
Tim Stedman, CEO, Storegga, said the UK is already behind in deploying CCUS compared with other countries, and further delays could put jobs, industries, and economic growth at risk.
“Despite being a major player in renewable energy generation, the UK was unable to establish a foothold in the global value chain for wind and solar power. We cannot risk repeating our past mistakes – the UK must recognise the opportunity for CCS to create a new engine for clean, economic growth,” he said.
He said alongside value for money, policy certainty is crucial so businesses can invest with confidence, supporting a clean, resilient, and secure energy system that is vital for the economic future.
“Backing CCS isn’t just about reducing emissions – it’s about unlocking economic growth and securing the UK’s place as a clean energy superpower. Projects like Acorn CCS in Scotland will create high-skilled jobs, attract investment, and position the UK as a global leader in carbon management.”
He said CCS has been operating safely for decades, including in the North Sea, with Norway’s Sleipner and Snøhvit projects storing CO2 offshore since the 1990s, demonstrating large-scale CCS works.
More recently, Norway’s Longship project and the Northern Lights CO2 transport and storage network are building on that success. “The UK has a similar opportunity with its world-class offshore infrastructure, skilled workforce, and energy expertise to decarbonise not only our industries but also those of our European neighbours, bringing additional economic benefit,” he said.
Unlike some industrial clusters that are concentrated in one location, Scotland’s industries, including refining, chemicals, cement, and power generation, are spread across different sites.
“The Acorn project provides the essential infrastructure to connect these dispersed emitters to permanent CO2 storage in the North Sea, ensuring they can decarbonise while maintaining operations and jobs. It enables carbon capture at the Peterhead Power Station, which would provide flexible, reliable generation to balance the UK’s growing reliance on renewables, and also supports decarbonisation of the St Fergus gas terminal,” he added.
“The technology is proven, the infrastructure exists, and industry is ready to invest. What’s needed now is clear, long-term policy support to establish a real CCS industry beyond individual projects.”
The UK’s energy transition will deliver a cleaner and less expensive energy system but oil and gas will dominate across the next decade leading to Net Zero targets being missed by 2050, according to DNV’s 2025 UK Energy Transition Outlook (ETO) recent report.
Read more: UK making progress but ‘falling short’ of Net Zero
