The National Audit Office (NAO) has today published its report into the UK Government’s running of a second Carbon Capture and Storage (CCS) competition. The agency has been analysing how the competition, which had set aside £1 billion for demonstrating CCS, was managed between 2012 and 2015 before its cancellation in November 2015. The report recommends that lessons learned from the competition should be used to guide a new CCS strategy.
The NAO’s report is a welcome illustration of the checks and transparency in UK Government. It is clear that united governance, across departments, did not exist in the CCS endeavour since the original competition vehicle was created in 2007. The culmination of this lack of unity was the unforeseen decision by HM Treasury to withdraw promised funds.
The problem may have been created by the then Department of Energy and Climate Change, but could also be viewed as deliberate intent over a long period by the Treasury to obfuscate the competition’s progress.
The contrast in terms of preference between CCS, with tortuous and difficult procurement, and the new nuclear project at Hinkley, with its sugar-coated contract terms, is stark. Additionally, there is an NAO undercurrent that the industry-ready and deliverable CCS project at Peterhead in north east Scotland could have been passed over for being in the “wrong” part of the UK.
Yet multiple analyses in the UK, the EU and globally all show that CCS remains an essential plank to include in any national effort for decarbonisation. There are no known alternatives to assist in growing and maintaining industry jobs with minimal greenhouse gas emissions. Jobs that are central to UK manufacturing – plastics, petrochemicals, steel, glass, cement, paper, distilling, fertilisers.
Taking the carbon out of methane gas for providing domestic and business heating is clearly another unsolved problem where CCS is a powerful solution. And it is increasingly clear, from IPCC climate modelling outputs, that CCS will be needed to provide the “negative emissions” to tackle greenhouse gases already emitted to atmosphere. How will the UK claw back its global position in low-carbon leadership, having plunged from hero to zero?
Fortunately, the NAO report reveals and highlights the extent of UK investment in CCS – £160 million. This is capable of being built on and utilised in the immediate future to recover UK industrial leadership. The Department of Business, Energy & Industrial Strategy (BEIS), as a much bigger and value-focused department, now has the opportunity to recapture industrial strategy from the Treasury.
The assessment and delivery of CCS has been overly focused on its role in electricity generation, while not appreciating its crucial role in deep decarbonisation of the economy, including industry, heat and transport.
During the past 15 years of effort, millions of tonnes per year of pure CO₂ have been vented to the atmosphere from industrial sources. Industrial processes provide a least-cost pathway to starting CCS in the UK. In developing a new CCS strategy, we suggest that BEIS looks to de-risk CCS by supporting smaller and less complex projects, an approach that is well-established for many technical innovations.
These projects can deliver regional infrastructures of CO₂ capture, transport and storage – as outlined in the Oxburgh report. Value-led regulated networks of CO₂ removal and disposal can then be extended incrementally.
This brings the added value of retaining offshore industry skills and defers decommissioning payments, while simultaneously ensuring retention of key pipeline and offshore infrastructures – which, at public expense, have already been assessed and proven suitable for CO₂ re-use.
Professor Stuart Haszeldine, University of Edinburgh and SCCS Director, said:
What the UK needs now is a joined-up government company to act as contract owner and manager, but not operator, of CCS from CO₂ collection to transport and offshore storage. If the UK fails a fourth time then both Norway and the Netherlands are poised to dominate this big European growth business, which was invented in the UK but not built here.
Read the full NAO report here.