1Introduction
1.Carbon capture usage and storage (CCUS, see Box 1) is necessary to meet national and international climate change targets at least cost.1 In the UK, failure to deploy CCUS could double the cost of meeting our targets under the Climate Change Act 2008, rising from approximately 1% to 2% of GDP per annum in 2050.2 It would also mean our country could not credibly adopt a ‘net zero emissions’ target in line with the Paris Agreement’s 1.5°C aspiration.3 This is a more ambitious policy on which the Government has asked the Committee on Climate Change (CCC) to advise on timing and viability.4 At the global level, the Intergovernmental Panel on Climate Change (IPCC) has estimated the cost of limiting warming to 2°C would increase by 138% without carbon capture and storage (CCS).5 Further, the majority6 of IPCC-assessed pathways to limit warming to 1.5°C are highly dependent on both CCS and carbon dioxide removal technologies, with bioenergy with carbon capture and storage (an evolution of CCS) being one of the two most commonly utilised removal options.7 The widespread agreement of experts on the necessity of CCUS exists despite the relative immaturity of the technology: worldwide there are only 18 large-scale facilities in commercial operation, with a further five under construction.8
Box 1: Definitions
Carbon capture, usage and storage (CCUS) is a set of technologies which can together capture carbon dioxide from waste gases at industrial facilities, and either ‘lock up’ this carbon dioxide in offshore geological storage sites, where it can be stored indefinitely (carbon capture and storage, CCS), or reuse it in industrial processes (carbon capture and usage,9 CCU). CCUS has the potential to help decarbonise many areas of the economy, including power, heating, transport and industry. It can be used to very substantially lower emissions from the combustion of fossil fuels or to produce clean hydrogen from natural gas. Although this report examines CCUS as a whole, we sometimes refer to CCS or CCU individually when points apply only to these particular technologies.
Figure 1 An illustration of carbon capture and storage. 
Source: Adapted from National Infrastructure Commission10
Research and Development is underway to combine CCS with other technologies to generate so-called ‘negative emissions’ which would actively reduce the total amount of carbon dioxide in the atmosphere. These are anticipated to play an important role in meeting the UK’s longer-term climate change ambitions, particularly if the UK adopts a ‘net zero’ target in line with the ambitions of the Paris Agreement. Negative emissions technologies reliant on the development of CCS include bioenergy with CCS (BECCS) and direct air carbon capture and storage (DACCS).
2.The UK is considered to have one of the most favourable environments globally for commercial CCUS, ranking fourth in the Global CCS Institute’s CCS Readiness Index.11 However national interest in the technology was perceived to be only ‘average’ compared to other countries in 2018.12 This lack of enthusiasm is symptomatic of CCUS’ turbulent history in the UK, and the lack of sustained policy support for the technology, despite a decade of repeated—and increasingly urgent—calls from official bodies and parliamentary inquiries to bring forwards its deployment.13 CCUS’ critical role has been recognised since the 2003 Energy White Paper, with successive Governments aiming to develop large-scale projects.14 A first CCS demonstration competition was launched in 2007 and was followed in 2009 by a commitment to support up to four CCS demonstrations over the following decade, in order to “enable wide-scale deployment of CCS through the 2020s”.15 These commitments were reiterated by the Coalition Government in 2010.16 However in 2011 the first demonstration competition was cancelled, because it could not be funded within the £1 billion budget agreed in the 2010 Spending Review.17 A second £1 billion competition was launched in 2012 but cancelled in 2016, due to concerns about the future costs for consumers.18 Investigations by the National Audit Office have identified a lack of early cross-Departmental agreement on the budget for the competitions, specifically from the Treasury, as contributing to the cancellations in both cases.19
3.The Clean Growth Strategy set out renewed Government interest in CCUS, with an ambition to become an international leader in the technology, and to retain the option of deploying CCUS at scale in the 2030s.20 This was followed by the establishment of a CCUS Cost Challenge Taskforce in early 2018 to identify routes to reduce deployment costs. The Taskforce’s report, published in July 2018, was followed by the Government’s CCUS Action Plan in November, and most recently, the creation of an industry-led CCUS Advisory Group in March 2019.21
Our inquiry
4.We launched our CCUS inquiry on 29 May 2018, with a specific aim to complement, rather than replicate, the work of the CCUS Cost Challenge Taskforce. We therefore did not focus on routes to achieve cost reductions, but instead sought to test the Government’s commitment to CCUS technology, and more specifically its stated aim to “ensure that government has the option of deploying CCUS at scale during the 2030s, subject to costs coming down sufficiently”. We have also closely investigated the opportunities and challenges of CCUS for local industries, with the aim of identifying appropriate routes forward that can maximise the geographic benefits of the technology, a theme closely linked to our ongoing scrutiny of the Industrial Strategy.22
5.During our inquiry we received 52 written submissions in response to our call for evidence, and held three evidence sessions. We also received 17 letters from industry stakeholders, and one from the Minister, in response to specific requests for information. We took the opportunity to visit Teesside to learn about the potential impacts of CCUS first-hand through visits to CF Fertilisers and Wilton International; to hold discussions with local government, businesses, investors and developers; and to take evidence from stakeholders representing all five of the industry clusters seeking to deploy CCUS in the near-term. We are grateful to all those who took the time to contribute to our inquiry.
This report
6.Chapter 2 of this report examines the role of CCUS in delivering least-cost decarbonisation and the adequacy of the Government’s targets for deployment. Chapter 3 explores the industrial opportunities and challenges of CCUS, both domestically and for export, while Chapter 4 investigates commercial barriers and options to create viable business models for the technology. Chapter 5 considers the potential role of CCUS in local industry clusters and the challenges associated with selecting the first clusters for deployment. In Chapter 6 we present our overarching conclusions.
1 Carbon Connect, Future Electricity Series Part 1: Power from Fossil Fuels (April 2013); CCC, An independent assessment of the UK’s Clean Growth Strategy From ambition to action (January 2018); Energy Technologies Institute (ETI), Targets, technologies, infrastructure and investments – preparing the UK for the energy transition (2015); IPCC, Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (2014); International Energy Agency (IEA), Energy Technology Perspectives 2017 (2017)
2 CCC, An independent assessment of the UK’s Clean Growth Strategy From ambition to action (January 2018); Energy Technologies Institute (ETI), Targets, technologies, infrastructure and investments – preparing the UK for the energy transition (2015)
4 Department for Business, Energy and Industrial Strategy (DBEIS), UK climate targets: request for advice from the Committee on Climate Change (15 October 2018)
5 IPCC, Climate Change 2014: Synthesis Report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (2014)
6 A few pathways exclude CCS but require radical reductions in energy demand that would be extremely challenging to achieve.
7 IPCC, Mitigation Pathways Compatible with 1.5°C in the Context of Sustainable Development in Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty (2017)
8 Global CCS Institute, The Global Status of CCS 2018 (2018)
9 For a more detailed discussion of carbon capture and usage, see Carbon Capture and Usage, POSTbrief 30, Parliamentary Office of Science and Technology, October 2018.
10 National Infrastructure Commission (CCU0625); National Infrastructure Commission, Congestion, Capacity, Carbon – priorities for national infrastructure (October 2017)
11 Global CCS Institute, The Carbon Capture and Storage Readiness Index 2018: Is the world ready for carbon capture and storage? (2018)
12 As above
13 CCC, Building a low-carbon economy – the UK’s contribution to tackling climate change (December 2008); CCC, The Fourth Carbon Budget Review – part 2: the cost effective path to the 2050 target (December 2013); CCC, An independent assessment of the UK’s Clean Growth Strategy From ambition to action (January 2018); Energy and Climate Change Committee , Ninth Report of Session 2013–14, Carbon capture and storage, HC 742; Environmental Audit Committee, Ninth Report of Session 2007–08, Carbon capture and storage, HC 654; HM Treasury, The Economics of Climate Change: The Stern Review (2006); Report of the Parliamentary Advisory Group on CCS, Lowest Cost Decarbonisation for the UK: the Critical Role of CCS, (2016); Science and Technology Committee, First Report of Session 2005–06, Meeting UK Energy and Climate Needs: The Role of Carbon Capture and Storage, HC 578-I
14 Department of Trade and Industry (DTI), Energy White Paper: Our energy future - creating a low carbon economy, Cm 5761, February 2003; DTI, Meeting the Energy Challenge: A White Paper on Energy, CM 7124, May 2007; Carbon capture and storage: additional background, Standard Note SN06136, House of Commons Library, March 2011; Carbon capture and storage, Standard Note SN05086, House of Commons Library, July 2014; Carbon Capture and Storage, Debate Pack CDP-2017–0188, House of Commons Library, October 2017
15 Carbon capture and storage: additional background, Standard Note SN06136, House of Commons Library, March 2011; Department of Energy and Climate Change, Government Response to the House of Commons Environmental Audit Committee Report: Carbon Capture and Storage (CCS), Cm 7605, August 2009, p 8
16 Carbon capture and storage: additional background, Standard Note SN06136, House of Commons Library, March 2011
17 National Audit Office (NAO), Carbon capture and storage: lessons from the competition for the first UK demonstration, HC 1829, March 2012
18 NAO, Carbon Capture and Storage: the second competition for government support, HC 950, January 2017
19 NAO, Carbon capture and storage: lessons from the competition for the first UK demonstration, HC 1829, March 2012; NAO, Carbon Capture and Storage: the second competition for government support, HC 950, January 2017
20 DBEIS, The Clean Growth Strategy: Leading the way to a low carbon future, October 2017
21 CCUS Cost Challenge Taskforce, Delivering Clean Growth: CCUS Cost Challenge Taskforce Report , July 2018; DBEIS, The UK Carbon Capture Usage and Storage deployment pathway: An Action Plan, November 2018; “Carbon capture: Shell, BP, Tata Steel, and Drax join £1m UK advisory group, Business Green”, 22 March 2019
22 Business, Energy and Industrial Strategy (BEIS) Committee, Seventeenth Report of Session 2017–19, Industrial Strategy: Sector Deals, HC 663; BEIS Committee, Supporting regional investment and growth inquiry, accessed 5 April 2019
Published: 25 April 2019