UK urged to fund carbon capture tunnel network beneath North Sea

carbon captureThe UK parliament’s advisory group on carbon capture and storage (CCS) has proposed the construction of a network of tunnels to pump carbon dioxide emitted by British industry into disused oil and gas wells under the North Sea.

The report comes 10 months after the government abandoned its CCS Commercialisation Competition, which was offering up to £1bn ($1.3bn) to support the design, construction and operation of the UK’s first commercial-scale CCS projects.

“This needs government action”
– Lord Oxburgh, chair of the report
The advisory group’s report, Lowest Cost Decarbonisation for the UK: The Critical Role of CCS, argues that the cost of building the pipelines required to transport the carbon to the North Sea should be met by the government. It also argues that industry should be offered “Industrial Capture Contracts” that pay them to collect their carbon.

This is likely to prove expensive for UK consumers, who will ultimately fund the capital and operational costs of the system, and may attract criticism for reversing the “polluter pays” principle. But the report argues that only the government has the financial resources to put the plan into action, and that it would avoid the much higher costs of failing to decarbonise UK industry.

These costs, to UK consumers, could be £1-2bn per year by the 2020s, and £4-5bn per year in the 2040s, the report says, citing the UK’s independent Committee on Climate Change.

The report was chaired by Lord Oxburgh, the former chairman of Shell. He told BBC News: “There are some things that are best left to the private sector, but CCS on industry isn't one of them. The network of pipes taking carbon from industrial plant into the North Sea would be far beyond the commercial reach of individual companies. This needs government action.”

Some form of CCS is seen necessary to allow the UK is to meet the challenges facing its electricity sector while complying with its climate change obligations.

A report by the National Audit Office, parliament’s spending watchdog, published in July, pointed out that the UK may have to construct as much as 95GW of generating capacity over the next 20 years while still meeting its target of cutting carbon emissions to 20% of their 1990 level by 2050.

The advisory group report says that by 2050, CCS could be responsible for reducing carbon emissions from gas power stations by 40%, saving up to £5bn annually compared with alternative strategies.

Nick Hurd, the climate change minister, told BBC News: “We are looking forward to seeing the CCS report. We are keen to get new ideas on how to promote CCS.”

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