Select committee: Public Accounts Committee
Conclusion 7
8th Report - Carbon Capture, Usage and Storage
Published 7 Feb 2025
Addressed to HM Treasury
Public Accounts Committee Carbon Capture, Usage and Storage All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
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 Treasury which has developed as the projects have matured.16 HM Treasury announced up to £20.0 billion of funding in March 2023 for the early deployment of CCUS17 and made a further announcement in October 2024, increasing the funding to £21.7 billion over 25 years and specifying that this was to cover the first five projects.18 In November 2024, the Department recognised contingent liabilities with a maximum value of £34.4 billion and a ‘reasonable worst–case’ value of £14.3 billion. These potential liabilities cover the risks the Department is underwriting for the CCUS programme.19
From: Public Accounts Committee, 8th Report - Carbon Capture, Usage and Storage (HC 351), 7 February 2025
Government response
Latest Treasury Minutes progress report to the Committee of Public Accounts on the Eighth Report of Session 2024-26
The government responded to the whole report on 4 June 2026.
Treasury minutes: Government response to the Committee of Public Accounts on the Eighth report from Session 2024-25
Published 6 May 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government states that it agrees with the Committee's recommendations across the areas covered, while saying that for annual reappraisal of value for money its process is "ongoing, dictated by the project pipeline, rather than a fixed annual schedule".
- On annual reappraisal of value for money, the government says it agrees with the recommendation but reviews the approach "primarily" via the Business Case process, ahead of final investment decisions, and not on a fixed annual schedule.
- The government acknowledges that the 2030 ambition of capturing and storing 20-30 million tonnes of CO2 per year "is no longer achievable", and will publish a report setting out its plan to meet carbon budgets, with a target implementation date of Spring 2025.
- On BECCS, biomass sustainability criteria "will be developed" for any future support, and the department "plans to consult later this year" on a common biomass sustainability framework. Target implementation date: Summer 2025.
- On sharing financial benefits, the government notes the business models already have mechanisms, such as a "gainshare" mechanism in the Net Zero Teesside agreement, and will "continue to evolve" them. Target implementation date: December 2026.