Recommendation 9

Given the scale of the funding announced for the first five projects and the size of the contingent liabilities that the Department has recognised for its underwriting of the programme, the potential costs to taxpayers and consumers are huge. The Department intends to manage the risks through a series of business models that it has developed for each sector that CCUS 14 Q 12 15 C&AG’s Report, para 1.5 16 Q 12 17 C&AG’s Report, para 14 18 Government reignites industrial heartlands 10 days out from the International Investment Summit – GOV.UK 19 Written statements – Written questions, answers and statements – UK Parliament Statement HCWS211, 13 November 2024 20 C&AG’s Report, paras 1.5 and 3.4 21 CCUS0007 22 CCUS0014 23 Qq 9–10 11 may be deployed in.24 It told us that these models are structured in such a way that, apart from very small grants worth less than 2% of the overall funding envelope, the projects in the CCUS programme will only be paid once they are operating.25 It also intends to structure the contracts in such a way that projects will receive lower payments if they are not meeting certain criteria, and could be cancelled in extreme cases of under–performance.26 As yet, none of these business models or contracts have been tested in practice.27 Securing future financial returns