DECC axes £1bn carbon capture fund

The Department of Energy & Climate Change has axed a £1bn fund to commercialise carbon capture & storage (CCS) in the UK.


The announcement was made by posting a regulatory announcement to the London stock exchange.

The statement read: “Today, following the Chancellor’s Autumn Statement, HM Government confirms that the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available.

“This decision means that the CCS Competition cannot proceed on its current basis.  We will engage closely with the bidders on the implications of this decision for them.”

The £1bn fund was intended to be allocated via a competition to support the development and deployment of CCS projects in the UK.

The muted announcement comes just hours after the Chancellor George Osborne announced during the Autumn Statement that DECC’s budget will be reduced by 22% over the next four years, delivered through efficiencies in corporate services and reducing the cost of contracts.

This doesn’t take into account DECC’s innovation programme, which will double to £500m over the next five years, ideally to strengthen the future security of supply, reduce the costs of decarbonisation and boost industrial and research capabilities.

edie has reached out to DECC for a response, and at time of publication is awaiting reply.

Tough decisions

Commenting on the CCS cancellation Claire Jakobsson, head of climate & environment policy at EEF said: “The cuts to the UK’s CCS funding are extremely disappointing, whilst we understand that government has had to make some extremely tough decisions, this one is not in the long term interests of the UK economy or energy consumers.

“CCS has the potential to halve the costs of decarbonising the UK economy by 2050, which amounts to £32 billion a year by 2050. In choosing to save a relatively small sum of tax payer money in 2015, government is unnecessarily committing vast amount of future energy consumers’ money.

 “For many sectors, such as steel and cement, there are simply no other options available for cutting emissions. No CCS locks many industrial sectors into a carbon intensive future paying increasing amounts in carbon taxes.”

Continued support?

The news comes just months after the UK Government reiterated its support for carbon capture and storage technology following the disappointing news that energy giant Drax had pulled out the UK’s flagship project to build the White Rose CCS project in Yorkshire.

Earlier this month Global CCS Institute released figures showing that the 15 operational CCS projects worldwide would capture 28 million tonnes of carbon this year alone. CCS had the potential to reach 80 million tonnes if the proposed projectsin Peterhead and White Rose were completed.

Matt Mace

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