The UK government’s £22 billion investment in Carbon Capture and Storage technology promises to revolutionise how Britain handles emissions from heavy industry. Lauded by some as a crucial step towards net-zero, the ambitious project is not without controversy. Environmental groups like Greenpeace warn that the move could extend the lifespan of fossil fuel industries, accusing the government of propping up outdated energy sources.
What is Carbon Capture & Storage (CCS) tech?
CCS technology is designed to reduce CO₂ emissions from industrial processes and power generation. It involves three main steps:
Capture:
CO₂ emissions are captured at the source, such as power plants or industrial facilities, before they can enter the atmosphere. Various methods can achieve this, including chemical absorption, physical adsorption, and membrane separation.
Transport:
Once captured, the CO₂ is compressed and transported to a storage site, typically via pipelines, although it can also be moved by ships or trucks, depending on distance and infrastructure.
Storage:
The captured CO₂ is then injected into deep geological formations, such as depleted oil and gas fields or deep saline aquifers, where it is stored securely underground. This process prevents CO₂ from being released into the atmosphere and contributing to climate change.
Despite the potential benefits of CCS, Greenpeace UK policy director Doug Parr cautioned that such investments risk “locking ourselves into second-rate solutions” instead of promoting genuine green alternatives. He added, “The bulk of this cash should be invested in creating new jobs in the green industries of the future, like in offshore wind, or rolling out a nationwide home insulation programme that will keep our homes warmer, energy bills lower, and less dependent on gas.”
Prime Minister Keir Starmer, Chancellor of the Exchequer Rachel Reeves, and Energy Secretary Ed Miliband unveiled the initiative during a visit to Runcorn on October 4, branding it one of the largest green spending commitments of the current parliament. With the budget approaching on October 30, Reeves emphasised that the announcement is part of a “drumbeat” of measures aimed at spurring economic growth. The government aims to rejuvenate Britain’s struggling heavy industry by establishing two major CCS clusters: one in Teesside in northeast England and another in northwest England and north Wales.
Friends of the Earth echoed concerns, stating: “Blue hydrogen, championed by the fossil fuel industry and produced from gas with carbon capture and storage, is not clean; there are fugitive emissions from extracting the gas, and not all of the carbon emissions from manufacturing it can be captured. The government needs a coherent industrial strategy to secure genuine green jobs and switch to clean energy. It must reject the false solutions peddled by the fossil fuel industry.”
Despite these criticisms, government officials anticipate that CCS will play a crucial role in achieving climate goals and reaching net-zero emissions. The Prime Minister noted that this commitment is expected to attract around £8 billion in private investment from leading energy companies such as BP and Norwegian firm Equinor. Reeves’ announcement follows her comments at the Labour Party conference, where she indicated plans to alter the government’s fiscal rules to accommodate more capital spending. “We’ll set out details of the fiscal rules at the budget, but we have got to make sure we unlock that space for capital investment,” she stated.
This announcement comes against the backdrop of fears regarding a potential energy price shock due to escalating conflicts in the Middle East. Reeves warned that Britain may not be insulated from the effects of rising oil prices, which spiked by 5% on October 3. “There’s a risk both on inflation and on GDP. It’s something we’ll keep a close eye on,” she said.
CCS technology aims to capture emissions from power plants or factories before they enter the atmosphere, transporting the emissions through gas pipes for storage beneath the seabed. Starmer remarked, “Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this groundbreaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all.”
Officials project that these projects will generate approximately £8 billion in private sector investment while directly creating 4,000 jobs and supporting an estimated 50,000 jobs in the long term. The East Coast Cluster has backing from oil companies like BP and Equinor, while the HyNet Northwest project is being developed by Italian oil company Eni. However, the use of CCS to produce “blue hydrogen” or to power gas plants remains contentious among environmental groups and climate scientists. Critics argue that it necessitates a continuous supply of fossil gas, producing emissions not captured during extraction and transportation. Campaigners advocate for increased investment in clean energy sources and “green hydrogen,” produced from water and renewable electricity using electrolysers.
Parr further criticised the investment, stating, “For a government that is committed to tackling the climate crisis, £22 billion is a lot of money to spend on something that is going to extend the life of planet-heating oil and gas production. Carbon capture may be needed for hard-to-abate sectors, such as cement production; however, hydrogen derived from gas is not low-carbon, and there is a risk of locking ourselves into second-rate solutions.”
Lorenzo Sani, an analyst at Carbon Tracker, criticised the government’s decision as a repetition of past mistakes, committing new funding without re-evaluating its CCS strategy. He cautioned that the plan is “anchored in outdated and overly optimistic [cost] assumptions,” risking further taxpayer investment in high-risk, non-future-proof carbon capture projects. Dr Andrew Boswell, an independent researcher in the CCS industry, dismissed the investment as a “massive giveaway to the fossil fuel industry” and a “bad decision” for energy bills, security, and the environment.
Britain’s initial foray into carbon capture began in 2009 under a Labour government but was abandoned in 2015 following a Conservative victory. The Conservatives later shortlisted two CCS projects for funding in 2021 but failed to commit before losing power in July. Miliband expressed pride in the advancement of the industry, stating, “I was proud to kickstart the industry in 2009, and I am even prouder today to turn it into reality. On Monday, 150 years of coal in this country came to an end. Today, a new era begins. By securing this investment, we pave the way for securing the clean energy revolution that will rebuild Britain’s industrial heartlands.”
**Photo:** PM Keir Starmer, Chancellor Rachel Reeves, and Secretary for Energy Security and Net Zero Ed Miliband toured Encirc Glass following the government’s announcement of nearly £22 billion in funding for Carbon Capture, Utilisation, and Storage projects over the next 25 years. (Credit: Simon Dawson/No 10 Downing St)
Elham Asaad Buaras
