Source · Select Committees · Public Accounts Committee
Recommendation 13
13
Not Addressed
Government announced £21.7 billion funding for the first five Track 1 CCUS projects
Conclusion
In early October 2024, the government announced £21.7 billion of funding, over 25 years, to support the first five projects in Track 1 of its CCUS programme.43 In early December 2024, the Department signed contracts with two projects in the East Coast Cluster – a power project (Net Zero Teesside) and a transport and storage company (Northern Endurance Partnership).44 The Department told us the East Coast Cluster covered the largest region of emissions.45
Government Response Summary
The government's response provides a general introduction to the CCUS programme, previous attempts to launch CCUS, the current approach, funding announcements and signed contracts with the first two projects. It does not directly address the conclusion about the funding announcement for Track 1 projects.
Government Response
Not Addressed
HM Government
Not Addressed
Introduction from the Committee Carbon capture, usage and storage (CCUS) technologies capture carbon before it is released into the atmosphere and store it permanently underground. They can be applied to a range of industrial applications, such as power generation and cement production. The government sees CCUS as essential to the UK achieving net zero by 2050. Previous governments have attempted to launch CCUS in the UK twice before, but these projects were cancelled in 2011 and 2016. The current approach, launched in 2018, aims to establish CCUS in geographical clusters. The government set a target of capturing and storing 20–30 million tonnes of carbon per year by 2030. In December 2024, it concluded that this target was not achievable. It has not yet set revised goals. The Department for Energy Security and Net Zero (the Department) is responsible for the CCUS programme. In October 2021, it announced that the first two clusters to receive government support (Track 1) would be HyNet, covering Merseyside and north Wales, and East Coast, covering Teesside and Humberside. HM Treasury announced up to £20.0 billion of funding in March 2023 to support the early deployment of CCUS. In October 2024 it increased the funding to £21.7 billion over 25 years to cover the first five projects. At the same time, the Department recognized contingent liabilities with a maximum value of £34 billion to cover the risks it is underwriting for the programme. In December 2024, the Department announced it had signed contracts with the first two projects at East Coast Cluster which it expects to begin operations in 2028.