Select committee: Public Accounts Committee
Recommendation 9
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 ↗
Recommendation (the committee's words)
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
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.