Select committee: Public Accounts Committee
Recommendation 12
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)
We asked the Department whether its business models allow for the government to take a share of any profit a project makes if the programme is successful.37 But the Department could not provide a compelling answer.38 Now that the Department has signed its first two contracts for carbon capture and storage, this will produce an “incredibly better investment” scenario for the private sector in the second tranche, which should encourage the Department to think about, for example, profit shares and equity stakes.39 HM Treasury hopes that the government agreeing support for projects in the programme’s Track 1 will provide industry with confidence over the government’s long term commitment to CCUS.40 The Department told us that it would be “looking very carefully at the economics of the developers and the investors, including what benefit they accrue from the projects…”.41 The Department assured us “that [was] exactly the sort of thing [it] is considering in an open–minded way.” 42 Assessing the programme’s affordability
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.