In November last year I blogged – rather emotively I might add – about the decision of the UK Government to withdraw funding for Carbon Capture and Storage (CCS) in the 2015 Spending Review.
The decision came as a shock, not least because it called into question UK commitment to climate change and added to growing concerns around the confidence of project developers and financiers to invest in UK low carbon infrastructure.
If we needed any further evidence that the implications of the decision were profound, then that evidence came today in the form of a letter from the Committee on Climate Change to Secretary of State Amber Rudd.
Set in the context of the Committee’s advice on the 5th Carbon Budget and the recent global climate agreement at COP 21, the Committee reiterates much of the evidence it published in 2015 around CCS cost reduction pathways. Once again the Committee confirms that the costs of achieving UK emissions reduction targets for 2050 would likely double if CCS is not developed at the pace and scale it suggests is necessary.
It highlights that the biggest cost reductions in CCS are most likely to come from shared infrastructure and economies of scale that come with strategic deployment, not technologies that you can buy in from other countries.
Most importantly, the Committee says that Government must “develop urgently a new approach to CCS in the UK”. And its advice could not be more timely.
Today – 28th January 2016 – the Commons Public Bill Committee will consider amendments to the Energy Bill, including one which would legally oblige the Secretary of State to come forward with a new CCS Strategy by September 2017. Whilst the timing around when such a strategy might be needed can be debated – and in the CCSA’s view it is needed much earlier, by around September 2016 – there is no doubting that clarity around the approach to CCS in the UK is urgently needed.
It’s important to note that this isn’t just the CCS industry calling for clarity on the route forward. In a letter sent to Prime Minister David Cameron earlier this week, organisations encompassing environmental NGOs, public interest advocates, energy intensive users, the Trade Union Congress and electricity generators all repeated the call for a new CCS Strategy and clarity on the Government’s approach.
The letter highlights: “Without an immediate, coherent and substantive response from Government to its recent policy reversals, confidence amongst project developers and investors across the full range of low-carbon technologies risks being irreversibly damaged.” The CBI went one step further and called not only for a long-term framework that provides investment certainty but also for additional funding for low carbon technologies and their supply chains, explicitly referring to CCS in the process.
A new CCS Strategy should be embraced by a Government keen to emphasise its commitment to tackling climate change, increasing energy security and ensuring the lowest possible cost to consumers from low carbon policies (not to mention its ambitions for maximising recovery from the North Sea). Amber Rudd has repeatedly said since the decision that CCS will be needed in the UK in the longer term whilst Energy Minister Andrea Leadsom committed to bringing forward a new approach to CCS “in months, not years” at a meeting of the All Party Parliamentary Group on CCS on 19th January.
The Spending Review decision took many people by surprise and risked completely derailing an industry that many Governments have struggled to commercialise in recent years. Now is the time for Government to consider a renewed approach to the technology and lay the foundations for a competitive UK CCS industry that the Committee on Climate Change says is so desperately needed. What better way to start than committing to developing a new Strategy through the Energy Bill discussions today and over the next few weeks.