Carbon Capture, Usage and Storage

Public Accounts Committee Closed Inquiry
Opened: 31 Oct 2024 Closed: 3 Apr 2025 Parliament page
Carbon Capture, Utilisation and Storage (CCUS) technology involves the capturing of CO2 emissions and their permanent storage underground. In 2021, the Government set out an ambition in its Net Zero Strategy for four CCUS clusters capturing 20 to 30 million tonnes of carbon per annum by 2030. The Department for … Read more
11 Recommendations
15 Conclusions
1 Report
1 Oral session
3 Letters
1 Event
Activity timeline 6 events
6 May
2025
Report published
7 Feb
2025
Report published
27 Jan
2025
Correspondence
20 Jan
2025
Correspondence
19 Dec
2024
Correspondence
12 Dec
2024
Oral evidence
Oral evidence sessions 1 session
12 Dec 2024
View on parliament.uk
Ashley Ibbett · Department for Business, Energy and Industrial Strategy Jeremy Pocklington CB · Ministry of Defence Paro Konar · Department for Energy Security and Net Zero Steve Field · HM Treasury
Title HC No. Published Items Response
8th Report - Carbon Capture, Usage and Storage HC 351 7 Feb 2025 26 Response document linked
Recommendations & Conclusions
26 results
2 Conclusion
8th Report - Carbon Capture, Usage…
Introduce mechanisms for taxpayers and consumers to benefit financially from future CCUS project success
While the Department is taking steps to incentivise efficient delivery of the CCUS projects, it has not established mechanisms to make sure that taxpayers and consumers will benefit financially should the programme be successful. The Department has developed a range … Read more
HM Treasury
View details
3 Conclusion
8th Report - Carbon Capture, Usage…
Assess the full CCUS programme's affordability for taxpayers and consumers amid cost of living pressures
The Department and HM Treasury have yet to assess the full financial impact of the CCUS programme on taxpayers and consumers. The costs of the CCUS programme are significant: in November 2024 the government announced £21.7 billion of funding over … Read more
HM Treasury
View details
4 Conclusion
8th Report - Carbon Capture, Usage…
Department and Treasury lack clarity on accounting for CCUS project underperformance and scientific advances
The Department and HM Treasury lack clarity on how they would take account of project underperformance and advances in scientific understanding as part of their ongoing assessment of the programme’s future. The Department had a clear set of five factors … Read more
HM Treasury
View details
5 Recommendation
8th Report - Carbon Capture, Usage…
Set out rationale for supporting CCUS in each sector, considering cost-effective alternatives
To date, the Department has done little to ensure that government support for CCUS is directed to the sectors or locations where it will be essential for achieving net zero. CCUS is currently seen as the only way to decarbonise … Read more
HM Treasury
View details
6 Recommendation
8th Report - Carbon Capture, Usage…
Set out urgent new carbon capture targets and clarify how to address net zero shortfall
The Department has downgraded its ambitions for the CCUS programme, stating that the original 2030 ambitions are no longer achievable. The current CCUS programme is the government’s third attempt to introduce the technology. Compared with previous attempts, the government is … Read more
HM Treasury
View details
1 Conclusion
8th Report - Carbon Capture, Usage…
Committee receives evidence on Department's carbon capture, usage and storage programme
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Energy Security and Net Zero (the Department) on its carbon capture, usage and storage programme.1
HM Treasury
View details
7 Conclusion
8th Report - Carbon Capture, Usage…
Department and Treasury agree CCUS funding limits but recognise substantial contingent liabilities
A major factor in the failure of the second CCUS competition was the lack of agreement between the Department and HM Treasury on funding limits.15 The Department told us that this time it had agreed an affordability envelope with HM … Read more
HM Treasury
View details
8 Conclusion
8th Report - Carbon Capture, Usage…
Significant risks and unproven technology hinder successful CCUS implementation at commercial scale
Significant risks to the successful implementation of CCUS technology remain. There are still no CCUS plants operating at a commercial scale in the UK and the technology is unproven at the scale being planned.20 For example, written evidence we received … Read more
HM Treasury
View details
9 Recommendation
8th Report - Carbon Capture, Usage…
Untested business models and contracts expose taxpayers to huge CCUS programme costs
Given the scale of the funding announced for the first five projects and the size of the contingent liabilities that the Department has recognised for its underwriting of the programme, the potential costs to taxpayers and consumers are huge. The … Read more
HM Treasury
View details
10 Conclusion
8th Report - Carbon Capture, Usage…
Department established specific business models for Track 1 CCUS projects to allocate risks effectively
The Department established business models on which to base its support for each of the projects in the programme’s Track 1.28 These models set out how costs and risks are distributed between the government and the project.29 The Department told … Read more
HM Treasury
View details
11 Conclusion
8th Report - Carbon Capture, Usage…
Department aims to shift financial risk from government to self-sustaining CCUS market by 2035
Looking to the future, the Department told us it wants to move the balance of risk away from the government as the market for CCUS evolves.33 The Department’s current assessment is that, because projects are first–of–a– kind, there is an … Read more
HM Treasury
View details
12 Recommendation
8th Report - Carbon Capture, Usage…
Department lacks clear plan for government to share in successful CCUS project profits
We asked the Department whether its business models allow for the government to take a share of any profit a project makes if the programme is successful.37 But the Department could not provide a compelling answer.38 Now that the Department … Read more
HM Treasury
View details
13 Conclusion
8th Report - Carbon Capture, Usage…
Government announced £21.7 billion funding for the first five Track 1 CCUS projects
In early October 2024, the government announced £21.7 billion of funding, over 25 years, to support the first five projects in Track 1 of its CCUS programme.43 In early December 2024, the Department signed contracts with two projects in the … Read more
HM Treasury
View details
14 Conclusion
8th Report - Carbon Capture, Usage…
Uncertainty remains regarding precise consumer/taxpayer funding balance for the £22 billion CCUS programme
The Department told us it expects around three quarters of the allocation of financial support of almost £22 billion will be from levies on consumers (such as those using power generated by the Net Zero Teesside project).46 The remaining 25% … Read more
HM Treasury
View details
15 Conclusion
8th Report - Carbon Capture, Usage…
Department and Treasury acknowledge further funding required for later CCUS programme stages
The Department and HM Treasury have acknowledged that further funding will be required for the programme’s later stages, such as Track 1 expansion and Track 2 (which includes two more clusters).51 The Department told us that it is in “detailed … Read more
HM Treasury
View details
16 Recommendation
8th Report - Carbon Capture, Usage…
NESO report indicates power CCUS reduces energy costs but requires more upfront financial support
The Department referred us to recent work from National Energy System Operator [NESO] on decarbonising the power system.53 It told us that NESO’s report, which concluded that CCUS was one of two pathways to a low–cost energy system, highlighted that … Read more
HM Treasury
View details
17 Conclusion
8th Report - Carbon Capture, Usage…
Climate Change Committee deems CCUS essential for UK net zero targets, with ambitious 2030 goals
The Department began developing its current approach to CCUS in 2018, following two previous failures.58 The Climate Change Committee, which advises government on how best to meet its decarbonisation goals, considers CCUS to be essential for the UK to meet … Read more
HM Treasury
View details
18 Conclusion
8th Report - Carbon Capture, Usage…
Department made slow progress and scaled back initial carbon capture ambitions
However, the Department has made slow progress in getting the first tranche of projects running. It had initially hoped to sign contracts with the first carbon capture projects in the second quarter of 2022, but this has been repeatedly pushed … Read more
HM Treasury
View details
19 Conclusion
8th Report - Carbon Capture, Usage…
2030 carbon capture and storage targets deemed unachievable by the Department
In the latter part of 2024, the Department successfully concluded negotiations with two of the Track 1 projects. In December 2024, the Department announced it had signed contracts with the first two projects at East Coast Cluster: Net Zero Teesside … Read more
HM Treasury
View details
20 Conclusion
8th Report - Carbon Capture, Usage…
Value for money assessments do not fully mitigate unsuitable carbon capture project risks
When selecting which clusters to proceed with and which projects to select within each cluster, the Department assessed value for money against five criteria: deliverability; economic benefits; costs; carbon savings; and learning. Once the shortlist of Track 1 projects had … Read more
HM Treasury
View details
21 Recommendation
8th Report - Carbon Capture, Usage…
Concerns raised about CCUS effectiveness and unaddressed methane leakage from LNG supply chains
The Department recognised that there are some “contested views” concerning, for example, the effectiveness of CCUS in reducing emissions from gas–fired power stations.69 We received written evidence suggesting that there are higher levels of methane (a gas with significant greenhouse … Read more
HM Treasury
View details
22 Recommendation
8th Report - Carbon Capture, Usage…
No BECCS projects in Track 1 despite importance for unachievable 2030 greenhouse gas removal targets
The original 2030 targets for the CCUS programme, which the government has now told us are unachievable, included a goal for the UK to achieve 5 mtpa of engineered greenhouse gas removals. The bulk of this was expected to be … Read more
HM Treasury
View details
23 Recommendation
8th Report - Carbon Capture, Usage…
CCUS remains only viable decarbonisation method for specific industrial process emissions
At present, CCUS technology is the only way to decarbonise industries that generate emissions from physical or chemical processes, rather than from the combustion of fuels. For example, 60 to 70% of emissions from the cement industry come from chemical … Read more
HM Treasury
View details
24 Recommendation
8th Report - Carbon Capture, Usage…
Alternative pathways exist for power sector decarbonisation without relying on CCUS technology
In other sectors, there are viable methods to decarbonise that do not require CCUS. For example, the Department told us that CCUS could play a particularly important role in power generation.80 However, there are other ways that the UK could … Read more
HM Treasury
View details
25 Recommendation
8th Report - Carbon Capture, Usage…
Department's CCUS strategy prioritises cost-efficient geographical clusters for diverse industrial sectors
The Department’s approach to date has been focused on rolling out CCUS to geographical clusters. The Department told us that its cluster–based approach makes sense in terms of cost–efficiency as fewer and shorter pipelines need to be built and because … Read more
HM Treasury
View details
26 Recommendation
8th Report - Carbon Capture, Usage…
Industries needing CCUS are not always clustered; support for dispersed sites undecided
However, there is no guarantee that the industries most in need of CCUS will be located in a geographical cluster.85 A cement plant was short–listed for Track 1 in March 2023, but as yet government has not agreed terms with … Read more
HM Treasury
View details
Correspondence 3 letters
27 Jan 2025 To committee Letter from the Permanent Secretary of the Department for Energy Security and Net Zero relating to a response on contingent liabilities on Carbon Capture projects, 21 January 2025
Parliament page
20 Jan 2025 To committee Letter from the Permanent Secretary of the Department for Energy Security and Net Zero relating to contingent liabilities on Carbon Capture projects, 14 January 2025
Parliament page
19 Dec 2024 From committee Letter to the Permanent Secretary of the Department of Energy, Security and Net Zero relating to contingent liabilities on Carbon Capture projects - following the Committee's inquiry on 12 December 2024, 19 December2024
Parliament page