Recommendation 3

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 25 years to cover only the first five CCUS projects. There are three more projects that are still under negotiation as part of Track 1, an unquantified number of additional projects that are expected to join the HyNet and East Coast clusters as part of Track 1 expansion, and all the projects that will join the Track 2 clusters at Peterhead and Humberside. The Department has not indicated the likely cost of these projects. The Department and HM Treasury expect that around 75% of the cost of supporting these early projects will be met by levies on consumers who are already facing significant financial pressures, with the remainder funded by the Exchequer. Drawing on a recent report from the National Energy System Operator (NESO), the Department has concluded that supporting the deployment of CCUS in gas–fired power stations offers lower costs compared to alternatives. But NESO also concluded that this approach would require more upfront financial support. The Department has not looked at the likely financial impact on bills of the full CCUS programme at a time when households are already facing high energy prices. recommendation The Department and HM Treasury should assess whether the full CCUS programme will be affordable for taxpayers and consumers, given wider pressures on energy bills and costs of living. 5