Source · Select Committees · Public Accounts Committee
Recommendation 14
14
Acknowledged
Uncertainty remains regarding precise consumer/taxpayer funding balance for the £22 billion CCUS programme
Conclusion
The Department told us it expects around three quarters of the allocation of financial support of almost £22 billion will be from levies on consumers (such as those using power generated by the Net Zero Teesside project).46 The remaining 25% will come from the Exchequer.47 However, the Department does not yet know the precise balance of funding between the consumer and taxpayer as this will depend on the final terms of the contracts it signs with projects.48 And uncertainty remains around the funding available 37 Q 72 38 Q 73 39 Q 74 40 C&AG’s Report, para 3.16 41 Qq 73 42 Qq 73 43 Qq 1, 17 44 Q 1 45 Q 1 46 Q 17 47 Q 17 48 Q 17 13 for future stages of the CCUS programme.49 Regardless of whether the programme is taxpayer or consumer funded, the cost of the programmes is “a cost to the country”.50
Government Response Summary
The department continuously assesses the affordability and value for money of government support for CCUS as part of key policy and decision-making processes, working with HM Treasury to assess benefits, taxpayer affordability, and energy bill impacts.
Government Response
Acknowledged
HM Government
Acknowledged
3.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2025 3.2 The department continuously assesses the affordability and value for money of government support for CCUS as part of key policy and decision-making processes to keep the UK on the least cost pathway to net zero, including Carbon Budget Delivery Plans and through regular government Spending Reviews. 3.3 As with all major programmes, the CCUS Programme works with HM Treasury to assess the benefits of deploying CCUS along with taxpayer affordability, energy bill and cost of living impacts of CCUS Programme. 3.4 As part of the business case for supporting the initial phase of the East Coast Cluster and Hynet cluster, the department undertook a rigorous assessment of the affordability and value for money of both clusters in line with the principles set out in the Treasury Green Book. 3.5 This was a detailed analysis that drew on commercial data relating to the projects as well as other sources of evidence, including market data and evidence relating to Optimism Bias, to estimate of the costs and benefits of the projects over their lifetime. The business case considered the costs and benefits to society as a whole as well as the impacts on specific groups such as billpayers and taxpayers.