Advertisement
UK markets closed
  • FTSE 100

    7,952.62
    +20.64 (+0.26%)
     
  • FTSE 250

    19,884.73
    +74.07 (+0.37%)
     
  • AIM

    743.26
    +1.15 (+0.15%)
     
  • GBP/EUR

    1.1707
    +0.0013 (+0.12%)
     
  • GBP/USD

    1.2619
    -0.0004 (-0.03%)
     
  • Bitcoin GBP

    55,744.33
    +513.12 (+0.93%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,254.35
    +5.86 (+0.11%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • NIKKEI 225

    40,337.62
    +169.55 (+0.42%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,492.49
    +15.40 (+0.08%)
     
  • CAC 40

    8,205.81
    +1.00 (+0.01%)
     

Government Scraps £1bn Carbon Capture Scheme

The Government is cancelling a £1bn competition for carbon capture and storage technology on power stations, breaking a key Conservative manifesto pledge.

Notably absent from the Autumn Statement, the announcement was made to the London Stock Exchange (Other OTC: LDNXF - news) – meaning the £1bn funding aimed at developing technology which can capture polluting carbon emissions from power plants "is no longer available".

The decision to axe the funding, seen as important in tackling global warming, will be viewed as a major blow to UK credentials just days ahead of the UN climate change summit in Paris.

:: Osborne U-Turn On Tax Credits And Police Cuts

ADVERTISEMENT

Carbon Capture and Storage Association chief executive Dr Luke Warren said the announcement was "devastating".

He added: "Only six months ago, the Government's manifesto committed £1bn of funding for Carbon Capture and Storage (CCS).

"Moving the goalposts just at the time when a four-year competition is about to conclude is an appalling way to do business.

"This announcement is a real blow to confidence for companies investing in CCS.

"We call on the Government to come forward – as a matter of urgency – with their plans for CCS as this technology is critical for the UK's economic, industrial and climate policies.

"Without concrete Government support for CCS, the UK will lose the opportunity for cost-effective decarbonisation."

:: Spending Review 2015: The Key Points

Two projects had been hoping to take advantage of the funding.

One was backed by Shell (LSE: RDSB.L - news) and SSE (LSE: SSE.L - news) at Peterhead – while the other was based at Drax, the UK’s largest power plant.

Investment had been stopped in September.

CCS traps carbon dioxide from fossil fuel power plants like coal stations, and buries it underground so it won’t add to global warming.

The UN’s Intergovernmental Panel on Climate Change (IPCC) argues CCS is central to tackling climate change in the most cost-effective way.

Shadow energy secretary Lisa Nandy said: "Carbon Capture and Storage offers huge economic opportunities for Britain, and it could be a crucial tool for sustaining many of our most important industries in the years ahead.

"Year after year, the Prime Minister has personally promised to support CCS, so this is a huge betrayal for all of the communities who could have benefited so much from this cutting-edge technology."

:: The Autumn Statement In Two Charts

EEF, the manufacturers' organisation, warned that for many sectors such as steel and cement, there was no other way to cut emissions from industrial processes other than capturing and storing the carbon.

Claire Jakobsson, the organisation's head of climate and environment policy, said: "The cuts to the UK's CCS funding are extremely disappointing.

"Whilst we understand that the Government has had to make some extremely tough decisions, this one is not in the long-term interests of the UK economy or energy consumers.

"CCS has the potential to halve the costs of decarbonising the UK economy by 2050, which amounts to £32bn a year by 2050.

"In choosing to save a relatively small sum of taxpayer money in 2015, the Government is unnecessarily committing a vast amount of future energy consumers' money."