There has been “no signal” that the UK Government’s £20bn of planned funding for CCS would be at risk following a general election, said a leading trade body.
Speaking at an SPE Aberdeen event on Tuesday, Olivia Powis, UK Director at the Carbon Capture and Storage Association (CCSA), was asked whether the upcoming political showdown in the UK could impact the funding, announced by chancellor Jeremy Hunt in March.
She said CCSA “haven’t had any signal that money is at risk,” but warned there is need for clarity in the near term on how many projects it will be allocated to, and the timelines for doing so.
The Conservatives are trailing Labour in the polls, with a general election expected next year – or latest by end of January 2025.
Meanwhile CCSA has warned that carbon capture and storage projects in the UK risk going overseas, particularly over lack of infrastructure access or funding support – both of which remain in the hands of UK Government.
The group has identified several areas where the UK is behind schedule, including efforts to allocate regular funded contract rounds and permitting and consenting.
Ms Powis said: “There’s been no signal that would be impacted. I think one of the attractive points of the industry is we’ve identified almost £40bn would be invested from the industry, and this is upfront investment. It’s private sector investment into the industry and the money, the £20bn government subsidy, would not be called upon until those projects are in operation. So there’s a huge amount of investment up until there’s any call on those funds to move forward.
“We haven’t had any signal that money is at risk, but we do need some certainty in terms of how that money would be allocated, how many projects it will be allocated to and when so that the industry can start to see what the scale of the opportunity is.”
Last month, CCSA warned that nearly one-third of the 90 planned developments in the UK would consider a move overseas – which comes as places like the US and EU offer attractive incentive packages.
On the flip side, around £40 billion of investment could be attracted to the UK economy by 2030 if development of CCS is accelerated.
Asked whether 2030 timelines for CCUS storage could be missed, Mr Powis said there is a “real possibility” it will be if government can move quickly enough.
Otherwise it is “not through lack of ambition from the sector in terms of the number of projects they are looking to deploy”.
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