Recommendations & Conclusions
6 items
10
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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 us that it had separate business models for transport and …
Government response. The Department for Energy Security and Net Zero has created business models that provide the minimum subsidy required to support the projects, keeps the allocation of costs and risks under review with the aim of reducing subsidy over the long-term.
HM Treasury
11
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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 inherent risk [of failure] which the market will not take …
Government response. The Department for Energy Security and Net Zero has created business models that provide the minimum subsidy required to support the projects, keeps the allocation of costs and risks under review with the aim of reducing subsidy over the long-term.
HM Treasury
14
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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% will come from the Exchequer.47 However, the Department does not …
Government response. The department continuously assesses the affordability and value for money of government support for CCUS as part of key policy and decision-making processes, working with HM Treasury to assess benefits, taxpayer affordability, and energy bill impacts.
HM Treasury
17
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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 its legally binding climate ambitions, in Carbon Budget 6 (which …
Government response. The government provides background information on CCUS technologies and the UK's approach to achieving net zero, but doesn't directly address the specific ambitions for the CCUS programme mentioned in the conclusion.
HM Treasury
18
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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 back.61 It also scaled down its ambitions for the first …
Government response. The government provides background information on CCUS technologies and the UK's approach to achieving net zero, but doesn't directly address the specific delays and scaling down of ambitions mentioned in the conclusion.
HM Treasury
19
Conclusion
8th Report - Carbon Capture, Usage and …
Acknowledged
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 (a gas–fired power station with 58 C&AG’s Report, para 1.5 …
Government response. The government provides background information on CCUS technologies and the UK's approach to achieving net zero, but doesn't directly address the specific negotiation successes and the revised target mentioned in the conclusion.
HM Treasury