Out-Law News | 31 May 2018 | 4:42 pm | 2 min. read
CCUS was identified as central to the government's 'clean growth strategy' published last year, which set out a vision for a low carbon economy of the future.
However, while the strategy set out the government's aim to be able to deploy CCUS "at scale during the 2030s", it said it would only do so if the costs of the technology drop sufficiently.
"While we have explored ways to deploy CCUS at scale in the UK since 2007, the lack of a technological breakthrough to reduce the cost of CCUS and the cost structures and risk sharing that potential large-scale projects have demanded has been too high a price for consumers and taxpayers," it said. "It is clear from the relative lack of deployment of the technology that other governments have reached a similar conclusion."
However, despite the challenges, the government said the UK can "demonstrate international leadership" in CCUS, that CCUS is "a potentially large global economic opportunity for the UK", and that there is broad consensus across the world that CCUS solutions can play "a vital future role in reducing emissions".
Now the Business, Energy and Industrial Strategy (BEIS) Committee in the House of Commons has opened a new inquiry into CCUS to examine the government's support for CCUS and its plans to achieve its carbon emission reduction targets "should desired cost reductions not materialise".
Industry and other stakeholders have been invited to submit their written views on the topic. They have been asked to rate how essential CCUS is for the UK to meet its climate change targets and to offer a view on what "a realistic level of cost reduction to aim for – and by when" would be, as well as what alternatives the government should pursue if those cost reductions do not materialise. The deadline for evidence to be submitted is 22 June.
Rachel Reeves, chair of the BEIS Committee, said: "Carbon capture, usage and storage (CCUS) is expected to play an essential part in meeting the UK’s carbon budgets. Yet the Government’s budget to kick-start CCUS has been cut from £1bn to £100m. In this inquiry, we want to test the government’s ambitions in this area and to examine what policy levers need to be pulled to make large-scale CCUS a reality in the future."
"Clearer policy signals are needed if we are to create a market and commercialise this technology into the 2030s. If the government judge the costs are such that CCUS is not a viable option then they must spell out an alternative if the UK is to meet its carbon emission reduction targets," she said.
A government-commissioned taskforce is expected to report this summer on what options are available to facilitate cost reductions in CCUS.
Energy expert Chris McGarvey of Pinsent Masons, the law firm behind Out-Law.com said: "As the clean growth strategy alludes to, as a first of a kind project, the upfront cost of CCUS is challenging when compared to the rapid cost reductions realised in more established renewables and battery storage technologies. However, in the longer term, the Committee on Climate Change has made clear that it will be significantly more expensive for the UK to achieve its 2050 emission reduction targets without adoption of CCUS."
"The previous two UK funding competitions have already been the subject of National Audit Office reports. Hopefully this new inquiry can really build on that work and seek to identify appropriate support instruments and policies which better enable CCUS to get off the ground," he said.