Billpayers face £800 hit from Miliband's carbon capture gamble

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07-02-2025

Ed Miliband's decision to spend £22bn on 'unproven' carbon capture technology is a high-risk 'gamble' that will have a 'significant' impact on bills, MPs have warned.
A damning report from the Commons Public Accounts Committee (PAC) said the technology had never been tested, was likely to prove very expensive and may not work.
Mr Miliband, the Energy Secretary, has said the UK can only reach net zero by deploying carbon capture and storage (CCS), where CO2 from power stations and factories is captured and buried underground.
The Government has committed to investing £22bn into the technology, most of which will be loaded on to consumer bills and cost the equivalent of £800 per UK household.
MPs said Mr Miliband had not properly investigated whether the technology was affordable and raised the alarm about the viability of the technology.
The PAC report said: 'The Government's backing of unproven, first-of-a-kind technology to reach net zero is high risk.
'We are calling on the Government to assess whether its full carbon capture, usage and storage (CCUS) programme will be affordable for taxpayers and consumers, given wider pressures on energy bills and the cost of living.'
The report, based on evidence from multiple experts, points to growing doubts over whether the technology can ever be viable.
It said: 'There are no examples of CCS technology operating at a commercial scale in the UK, meaning the performance of early projects is uncertain.
'Evidence submitted raises concerns that CCS may not capture as much carbon as expected and experience from Norway suggests that performance on the scale expected by the Department for Energy Security and Net Zero is far from guaranteed.'
It added: 'The costs of the CCUS programme are significant: in November 2024 the Government announced £21.7bn of funding over 25 years to cover only the first five CCUS projects.'
Schemes under way include Hynet, designed to capture CO2 from industries in Northwest England and North Wales and pipe it into depleted gas fields in Liverpool Bay; the East Coast Cluster in Teesside and the Humber; and the Acorn project in north-east Scotland.
The report said: 'The Department [of Energy Security and Net Zero] has not indicated the likely cost of these projects. The Department and HM Treasury expect that around 75pc of the cost of supporting these early projects will be met by levies on consumers who are already facing significant financial pressures, with the remainder funded by the Exchequer.'
Responding to the report, Richard Tice, energy spokesman for the Reform Party, said: 'This is another cost threatening to impoverish the UK for a technology that will not work.'
Mr Miliband launched the UK's carbon capture programme last October, with direct support from Sir Keir Starmer and Rachel Reeves.
In a joint statement they said the technology would 'create 4,000 new jobs, sustain important British industry, and help remove over 8.5m tonnes of carbon emissions each year – the equivalent of taking around 4m cars off the road'.
Ms Reeves said carbon capture was 'at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off'.
Carbon capture forms a key part of Mr Miliband's plans to decarbonise Britain's power system by 2030. It will be relied on to strip up to 30m tonnes of CO2 from UK emissions each year by 2030 – and more than 100m tonnes by 2050.
Ministers hope the technology can 'green' power stations and energy-intensive industries that still burn fossil fuels or wood.
Emissions are passed through a process that strips out waste CO2. This is then compressed into a liquid and pumped deep underground for permanent storage, eventually reacting with and becoming part of the surrounding rocks.
In practice, however, no one has succeeded in developing a full-scale operating carbon capture system, partly because of engineering problems but also because of the huge costs.
Scientists estimate that capturing and burying the CO2 generated by a typical gas-fired power station could absorb 20pc of its energy production.
A separate report by the National Audit Office raised similar concerns about the technology last year. It said: 'There is a particular risk associated with the technology being unproven at the scale being planned, and with dependence on specialist expertise and equipment.
'For example, one of the UK emitter projects is planning to build a gas-fired power station with carbon capture, but this would be 40 times larger than any existing examples globally.'
The Department for Energy Security and Net Zero was asked for its response.
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