Recommendation 4

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 it considered when assessing the value for money of the first two clusters and then the individual projects it selected as part of Track 1 of the programme. The Department and HM Treasury were also clear that projects would be subject to a further value for money assessment before awarding contracts. As part of this assessment it would consider the cost effectiveness of capturing carbon and wider economic issues such as investment in particular regions. But some recent scientific evidence suggests that producing liquid natural gas (which will be used to run several CCUS projects, such as Net Zero Teesside) leaks more methane, a potent greenhouse gas, into the atmosphere than previously thought. As CCUS will not reduce these ‘upstream’ emissions, this could undermine the rationale for pursuing certain projects. The government also expects bioenergy with carbon capture (BECCS) to play a significant role in providing negative emissions to offset residual emissions in other sectors. However, the National Audit Office has previously concluded that the government could not demonstrate the adequacy of monitoring arrangements for its existing schemes to support bioenergy in giving it confidence industry was meeting sustainability standards. In addition, Ofgem’s critical findings in its recent investigation on Drax (which has received more than £6 billion of public funding over the last two decades) over its approach to reporting against sustainability criteria, have raised concerns over whether BECCS offers a genuine path to reducing emissions. We are therefore concerned that any government support for BECCS at Drax will not necessarily support its net zero ambitions and are minded to examine further the issue soon. If not a