Statement on funding cut for CCS on power generation

The Government has announced in today’s Spending Review that the £1 billion funding for the Carbon Capture and Storage (CCS) Commercialisation Programme has been cut. This was intended to support demonstration of CCS on power stations in Yorkshire and Aberdeenshire.

Teesside Collective, which is working on a project to establish a CCS network on industrial facilities, has responded to the news.

Neil Kenley, Director of Business Investment at Tees Valley Unlimited, said on behalf of Teesside Collective:

“With carbon permits expected to quadruple in price by 2030, CCS is also the only sure fire way of retaining a competitive industrial base in the UK. Exempting energy intensives from climate change policy costs is helpful, but can only ever be a sticking plaster for reducing uncertainty, in the face of the challenge of climate change.

“The Committee on Climate Change’s projections and those of Energy Technology Institute are clear – CCS halves the cost of the UK meeting its binding carbon targets, by decarbonising fossil fuel power generation and energy-intensive industries like those in Teesside.

“Teesside is a hub for the UK industrial gas network. Teesside Collective is working with the Government, with other local energy intensives and is supporting partner clusters up and down the east coast.

“We’re developing our plans for the clean-up of the UK’s energy intensive industries, preserving and creating tens of thousands of jobs, as well as providing cost effective reduction of tens of millions of tonnes of carbon each year.”

Notes for editors

  1. Teesside Collective is being led by Tees Valley Unlimited (TVU), the Local Enterprise Partnership which is working with major employers in Teesside including Lotte Chemical, BOC, CF Fertilisers UK Limited (formerly known as GrowHow) and Sembcorp Utilities UK. All face stiff competition internationally and the prospect of escalating carbon permit prices in the future. They are joined by National Grid and NEPIC, which represents the Teesside process industry.
  2. Teesside Collective published a Blueprint for Industrial CCS in the UK in July. All documents are available from teessidecollective.co.uk.
  3. CCS is a group of proven technologies that can capture, transport and permanently store up to 90% of the CO₂ emissions produced by burning fossil fuels, preventing them from entering the atmosphere. To date, the focus in the UK has been on commercialising CCS for electricity generation. Teesside Collective is an important departure. Its premise is that a range of industries would be able to capture their emissions, plug them into a shared pipeline network, and send them for permanent storage under the North Sea.
  4. Teesside Collective had initial scoping funding from DECC and has made all data and reports publically available. Whilst further developed than other UK industrial hub, it is working collaboratively with industrial areas elsewhere in the UK and on the Continent. Discussions with the Government about next steps are ongoing.
  5. Media enquiries: Contact Mike Thomas on 020 7593 4000 or mike.thomas@madano.com