Chancellor Jeremy Hunt’s Spring Budget was slammed as a ‘missed opportunity’ for the UK Government to deliver long-term funding for the next wave of carbon capture projects.
The UK’s Spring Budget 2024 sets out the government’s progress in delivering the growth package from Autumn Statement 2023, including outlining the next steps on the £4.5bn ($5.7bn) funding package for strategic manufacturing sectors.
Despite the Government having previously pledged support to UK carbon capture, Ruth Herbert, Chief Executive of the Carbon Capture and Storage Association (CCSA), believes that the mark has been missed when it comes to carbon capture, utilisation and storage (CCUS) projects.
“Today’s budget was a missed opportunity for the Government to put in place a longer-term revenue support envelope for the next wave of projects – to provide the level of certainty they need to move forward,” she said.
Last year’s Budget saw a commitment to investing £20bn ($25.5bn) to scale-up CCS projects across the UK to be rolled out over a period of 20 years.
The government said that the funding will support the development of CCS initiatives in North Wales, North West of England and the East Coast.
However, Herbert claims that the funding has yet to reach the projects that need it most, despite pressing deadlines.
“The UK’s CCUS industry is still waiting for the funding announced in last year’s Spring budget to be committed to projects, with final investment decisions for projects in the North West and North East of England needed in the next few months.”
“Without this, the UK risks losing the opportunity to attract around £30bn ($38bn) of private investment into UK CCUS by 2030, which would create and protect tens of thousands of jobs and transform industrial regions across the UK.”
Ahead of the Budget, Jeremy Hunt had been told by the CCSA that time is running out’ to deliver on the UK’s CCS goals.
According to the organisation, lead-in times for CO2 storage sites stand at around 6-7 years and 3-4 years for capture projects.
With the UK aiming to capture and store 20-30 million tonnes of CO2 per year by 2030 and over 50 million tonnes per year by 2035, FIDs are in a state of uncertainty.
There was a silver lining, however, with smaller scale funding of £120m ($153m) announced for the Green Industries Growth Accelerator (GIGA).
The scheme aims to drive carbon capture and storage (CCS) and offshore wind farms, and to support UK manufacturing.
Mike Adams, CEO of Elemental Energies praised the Chancellor’s support of CCS funding through GIGA, calling it an ‘important display of commitment’ towards the sector.’
He added, “But the journey ahead demands substantial R&D and, without sufficient investment, our 2030 ambitions will not be achieved.”
The need to focus on R&D was echoed by John Hartley, CEO of Cambridge-based cleantech company Levidian.
Having called on the Chancellor to do more for companies involved in developing technology in the company’s Budget submission, Hartley emphasised the need for the government to ‘redouble’ its efforts on R&D.
“This includes creating a new R&D strategy that underpins partnerships between firms, higher education institutions and Government and takes the UK’s spending in this critical area to the G7 average by 2030.”
He also proposed that the Government coordinates an annual national R&D conference to boost cooperation and commit to ‘permanent expensing’ from all parties – enabling increased private sector research spending.
source: gasworld.com
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