MPs have given the energy secretary, Amber Rudd, until the first week in January to answer questions about the government’s withdrawal of funding for carbon capture and storage.
The technique, which traps carbon dioxide from coal and gas power plants, is regarded by some as essential for the viability of a UK fracking industry.
The energy and climate change select committee has sent Mrs Rudd a letter with five questions about the cancellation last month of a £1bn competition to develop CCS. They also quizzed her in person when she appeared before their committee last week.
The meeting almost slipped by unnoticed because it coincided with the parliamentary vote on fracking under national parks.
Funding for the CCS competition had been part of the Conservative Party 2015 election manifesto.
But on 25th November, a government statement informed the stock market:
“the £1bn ring-fenced capital budget for the Carbon Capture and Storage Competition is no longer available”
The competition was to develop the UK’s first CCS power plant and it was cancelled just days before the start of the international climate change talks in Paris.
The letter to Mrs Rudd from the committee’s chair, Angus MacNeil, said:
“Given the repeated to commitment of this and the previous Government to CCS, my committee was both surprised and disappointed by this decision, a feeling that appears to be shared across industry, business, investors and academia.”
Mr MacNeil (SNP, Na h-Eileanan an Iar), pictured left, asked:
- Why was the competition cancelled?
- What else is the government doing to support CCS?
- What is the future of CCS if gas remains an important part of the UK energy mix?
- What consideration was given to the signal the cancellation gave to investors?
- What future plans are there for supporting or encouraging the development of CCS?
He asked for replies by Wednesday 6th January.
On the day the letter was sent, Lord Chris Smith, the chair of the industry-funded Task Force on Shale Gas, described the cancellation of the competition as “absurd”. Speaking on the publication of the Task Force’s final report, he said:
“A serious development of CCS is in our opinion essential for the medium term viability of any significant shale gas industry.”
The day before, Professor Paul Younger, of University of Glasgow, who has supported fracking, said:
“I have always said that unconventional gas should only be considered an option provided we are making serious moves towards full-scale CCS.”
“Given the announcement my position is that the ethical platform for any perpetuation of fossil fuel use in the UK (or by others on our behalf) has been fatally undermined.”
On Wednesday last week, the energy and climate change committee quizzed Mrs Rudd on:
- Timing of the cancellation
- Inconsistent signals from the government on carbon emissions
- A timeline for CCS
- Money lost from the cancellation
Mr MacNeil, asked the secretary of state about the short notice for the CCS industry of the cancellation and the fact that some key people found out about it only on Twitter. He said:
“Is five minutes’ notice and finding out on Twitter entirely proper do you think?”
Mrs Rudd replied
“The Chairman refers to a specific example. I don’t know who he is referring to or what the particular circumstances were, but I can certainly tell you, from our point of view as a Department, we were careful to call all the major parties as soon as we knew.”
Another committee member, Labour’s Matthew Pennycook (Greenwich and Woolwich), asked Mrs Rudd whether she thought the government was sending a “worrying incongruence of signals”. He said:
“You came to this Committee five months ago and said, I think quite rightly, you would remain absolutely committed to carbon capture and storage, and yet just a month or so ago the Chancellor said it was not value for money. Don’t you agree that this is sending out quite inconsistent and dangerous signals to industry about whether you are truly committed to that technology?”
Mrs Rudd replied:
“I think the situation with carbon capture and storage is that, in the long term, it will be necessary to deliver on ambition for a really low carbon future. That could be in the 50s, the 60s, the 70s, but to get to zero emissions by the end of the century we will need to have some form of carbon capture and storage. Now for the UK was not the right time to commit to £1 billion on carbon capture and storage but that does not mean that my Department is not going to continue its interest in the area.”
Labour’s Rushanara Ali (Bethnal Green and Bow) suggested that the Chancellor, George Osborne, was an obstacle to Mrs Rudd’s ambitions and was undermining her efforts.
Mrs Rudd refused to accept that and replied:
“The Chancellor and I are agreed that the ambition is secure, clean and affordable energy, and getting the right balance of that is something we work together on.”
Mr MacNeil suggested that the Treasury saw the investment in the competition as a cost, rather than a saving for the future.
Mrs Rudd replied:
“We all have to work with the Treasury. We all have to live within our means. This was a tight Spending Review, and carbon capture and storage was one that did not go forward. It is £1 billion that is being spent now on other matters.
I do not think that it is correct to characterise this Government as somehow divided in that matter, but the fact is it was a tight spending round, and carbon capture storage funds are not part of the future at the moment.”
Alistair Carmichael (Lib Dem, Orkney and Shetland) asked whether there ever would be a right time for the Treasury.
Mrs Rudd replied:
“I think carbon capture and storage has to form a part of the long-term, low carbon ambition, not just for this country but internationally.”
“You want to deliver that as soon as possible?”
“What is that in terms of timeline?”
“It is difficult to tell. I am ambitious for our low carbon future and for a result internationally, which is why I fought so hard for a global deal, but this is not something that the UK can do on its own.”
Mr MacNeil said he’d heard figures of £300m-£400m had been lost in EU funding following the cancellation of the competition.
Mrs Rudd replied:
“The European Union were going to make a contribution. I don’t have to hand the exact sum but I do not think it is as large as the Chairman has suggested but I am happy to write to him about that. It was a significantly large amount from the UK taxpayers’ funds that were going to be required.”