Recommendation 2

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 of business models for applying CCUS to a range of sectors. The models form the basis of negotiations between the Department and the private sector 4 and outline how risks will be allocated between the different parties and set the payment mechanism. While the projects will receive the bulk of taxpayer and consumer support only when they are operational, the sums involved are substantial. Should the programme be successful, projects might eventually earn significant profits that are partly a result of early public support. Neither of the two contracts that the Department has already signed include any provision for the government to share profits or take an equity stake, or for consumers to benefit from lower energy bills should things go well. Nor does the Department seem to have considered any such ‘gainshare’ mechanisms when negotiating with the Track 1 projects. recommendation For all future CCUS projects, the Department should introduce mechanisms to make sure taxpayers and consumers benefit financially from the success of the projects they have supported financially.