Latest news with #ScottishCluster
Sunday Post
3 hours ago
- Business
- Sunday Post
£80m for carbon capture shelved after Greens threatened SNP pact
Get a weekly round-up of stories from The Sunday Post: Thank you for signing up to our Sunday Post newsletter. Something went wrong - please try again later. Sign Up Vital funding to accelerate a carbon capture and storage project that could create thousands of jobs in Scotland was shelved after the Scottish Greens threatened to put their power-sharing agreement with the SNP at risk, we can exclusively reveal. It is one of a series of stark revelations uncovered by a Sunday Post investigation into why £80 million promised by the Scottish Government for the landmark Acorn project has yet to materialise. The Acorn project would see harmful greenhouse gas emissions piped under the North Sea and then stored, creating almost 5,000 long-term jobs and billions of investment for the Scottish economy. But we found squabbling between political factions and attempts to shift blame have caused the money to be held up at a time when the north east is haemorrhaging jobs. The SNP offered up the cash to encourage the UK Government to rethink after the Scottish Cluster, a group of decarbonisation projects focused on Peterhead Power station, missed out on funding in 2021. But earlier this year, SNP energy secretary Gillian Martin admitted there were no plans to pay out and claimed that investors do not currently need the cash. Previously unseen private communications, memos and briefing notes show: The Scottish Greens threatened to publicly disagree with the government's energy strategy if it handed out the £80m for carbon capture – a move that could have put the Bute House agreement in jeopardy. Emails sent between senior SNP figures and notes issued by special advisors indicate the funding was not originally conditional on UK Government support – as SNP ministers now claim. There was nearly three months of delay in discussing the funding at ministerial level while jobs were placed at risk. Net Zero secretary Michael Matheson was rebuked by UK energy minister Greg Hands for releasing details of their 'confidential' meeting so he could make an announcement ahead of an Environmental Information Request going public. Last night the GMB union described the revelations as 'shocking confirmation of ministers' inertia as a jobs catastrophe looms in the North Sea'. Meanwhile, nearly £22 billion has been promised over the next 25 years for Merseyside and Teesside, supporting thousands of roles. What does the Bute House memo say? A Bute House memo dated December 2022 – nearly a year after the £80m was announced – illustrates the power the Greens held over government energy policy at the time. It states the group had already been handed assurances of changes made in 'several areas'. The author, Green MSP Mark Ruskell, notes this is particularly the case in the Just Transition chapter of the government's plans. © KATIE NOBLE The note says the Greens would 'likely need to publicly disagree' with elements of the Energy Strategy and Just Transition Plan if it was published in its current form. It states the party would like to see any financial support for carbon capture and blue hydrogen come out of UK Government money, 'reallocating Scottish Government funding for other pressing priorities'. It adds that this includes reallocating the £80m projected spend from the Emerging Energy Technologies Fund on the Scottish Cluster. The Scottish Government had previously warned withdrawing the funding would give the impression that it no longer supports Acorn and would be contrary to the Bute House Agreement – an argument refuted by the Greens in the memo. Jobs 'still at risk' Scottish Conservative energy spokesman Douglas Lumsden said: 'This internal memo, hidden until now, shows the extremist Greens have had a veto on SNP energy policy for years. 'Although the Emerging Energy Technologies Fund promised £80m to develop the Scottish Cluster, the Greens said no. Then it was canned. 'Tens of thousands of Scottish jobs remain at risk because Patrick Harvie's paw prints are still all over Scottish Government policy.' © DC Thomson Environmental groups are sceptical of carbon capture and argue it props up the fossil fuel industry by hiding emissions, rather than cutting them. But the energy firms behind Acorn estimate the project will add £17.7 billion to UK GDP by 2050, create over 10,800 jobs during construction and sustain 4,700 long-term operational roles. It has been listed since 2023 as one of two new carbon capture projects awaiting formal backing by the UK Government following approval of the two clusters in England. Greens stand by carbon capture stance Scottish Greens co-leader Patrick Harvie said his party has always been sceptical about both the Scottish and UK governments putting too much reliance on 'untested' carbon capture technology, adding that it is firmly opposed to using it as an excuse for more fossil fuel extraction or burning. He said: 'At best – if it ever works – it could reduce emissions from the residual use of fossil fuel while we do everything we can to shift to renewables. 'But it's too often being used as an excuse for business as usual, which is why it's no surprise to see the anti-environment Conservatives backing it.' © Jane Barlow/PA Wire The Scottish Government claims the delay in handing over the money is linked to the UK Government taking so long to approve the project. However, internal memos and correspondence reveal no such conditions were in place when the money was first allocated. In a letter to Shona Robison in December 2021 – six weeks before the Acorn funding announcement – Michael Matheson said the Scottish Cluster would be supported without caveat by the same £80 million from the same fund. This is parroted in a number of other pieces of correspondence sent by Matheson that have subsequently been obtained by The Sunday Post. Around six weeks later, advisers began to gameplan the 'conditionality of funding point', adding that the 'key point to make would be that the £80m is not enough, and UKG support is still required in terms of access to business models etc.' SNP minister rebuked We can reveal officials were then left scrambling to put out an announcement because a letter from Matheson to UK energy minister Greg Hands referencing the cash was set to be released to the public through an Environmental Information Request. But Matheson was given a dressing down by Hands on January 19 2022 for making the announcement following what was supposed to be a confidential meeting. Hands wrote: 'You had been seeking a meeting with me for some days, which I agreed to, but at no point during what I understood to be a confidential meeting between two ministers, was it said that a media notification would follow the meeting. 'Instead, we had I thought, agreed at the meeting that the two governments would work together, which is what I believe the Acorn project would want, and the people of Scotland would expect.' © PA Hands says he told Matheson during the meeting that the £80m funding 'needs careful consideration but does not address some of the key challenges'. These include the likely burden of ongoing revenue support payments and practical constraints of supporting multiple carbon capture projects in three different areas of the UK to launch at the same time. Further correspondence reveals the Scottish Government was not notified the Scottish Cluster would not be included in a list of fast-tracked projects before the announcement was put out publicly. © Thomas Krych/ZUMA Press Wire/Shu Three meetings between Matheson and Hands were arranged and then cancelled around this time and there was no direct response to the funding offer in Matheson's letter to the Chancellor in October 2021 or a subsequent letter from the first minister to the prime minister the following month. This meant there was a nearly three month delay in discussing the funding proposal at a ministerial level. 'Inertia and inaction' GMB Scotland secretary Louise Gilmour said needless delays in driving through investment for Acorn exposes the abject failure of UK and Scottish governments to protect the sector or deliver new jobs in green energy. She said: 'Offshore production and onshore supply chains are in crisis with thousands of skilled jobs on the line but, behind the scenes, our ministers are apparently spending their time on spin and squabbles. 'There is clearly no joined-up thinking between our governments and no concerted plan of action. Instead, there are politicians playing games. © Andrew Cawley 'There is only inertia and inaction while thousands of well-paid jobs are in peril along with the families and communities that rely on them.' The Scottish Government said its Programme for Government 'made clear' that it is committed to the £80 million of support. However no actual funding was allocated and the project was not even mentioned in the 2025-26 Scottish Budget. The government added that the funding is 'contingent upon the UK Government confirming a full-funding package and timeline for the Acorn project at the Spending Review'.
The National
29-04-2025
- Business
- The National
Grangemouth refinery officially ceases processing crude oil
From today, Petroineos has said it will be importing "all the products necessary to meet Scotland's demand for transport fuels". In September last year the company said the refining activities would cease in 2025 as it transitions to becoming an import terminal for finished fuels. Yesterday, the UK Government was urged to take 'urgent and decisive action' over the £200 million promised to Grangemouth workers in February. Prime Minister Keir Starmer said the UK Government would invest £200m into Grangemouth and that it should bring in 'three times that' in private funding, bringing the total to £800m. The financial package from the UK Government is an attempt to ensure that high-quality jobs and economic opportunity are not lost in the area. Owners Petroineos, which is shutting the plant this year with a loss of around 400 jobs, said the site makes a loss of £380,000 every day. READ MORE: Crucial new report spells out nine options for Grangemouth – see the full list However, Deputy First Minister Kate Forbes urged Starmer to accelerate the progress on the Acorn Carbon Capture project at Peterhead after the UK Government announced further funding for carbon capture projects in England without mention of finance or progress for the Scottish Cluster. At the time of the announcement, the SNP accused the Labour Government of treating Scotland as an afterthought. On Tuesday, at a parliamentary debate on supporting Scottish industry, Forbes is expected to call on the UK Government to be more transparent with the funds ringfenced for Grangemouth. Iain Hardie, regional head of legal and external affairs, said: 'Grangemouth refinery is no longer processing crude oil. Petroineos has invested £50 million in creating a modern import and distribution terminal capable of receiving finished fuels by sea for onward distribution to customers around the country. 'From today, we will be importing all the products necessary to meet Scotland's demand for transport fuels.' He continued: 'We would like to pay tribute to the workforce here. Our colleagues have shown incredible commitment, dignity and resilience during months of uncertainty regarding the future of this facility, through the consultation period, phased shutdown and the start of refinery decommissioning. 'It has been a challenging period but their professionalism has ensured security of fuel supply to our customers across Scotland and beyond.'
The Herald Scotland
27-04-2025
- Business
- The Herald Scotland
SNP's Flynn hits out at Labour over Acorn CCUS snub
However, there was no update on the Acorn CCUS project – based at St Fergus, near Peterhead. Stephen Flynn, the SNP's Westminster leader, said the Labour government were treating Scotland as an 'afterthought', warning that repeated delays to the project risked economic decline in the north-east and undermined efforts to reach the UK's legally binding climate targets. St Fergus in Aberdeenshire (Image: PA) Acorn is Scotland's only large-scale CCUS initiative. It aims to capture carbon dioxide emissions from industrial facilities and power plants, transporting them offshore to be permanently stored in depleted gas fields beneath the North Sea. The project plans to reuse existing oil and gas infrastructure, notably pipelines that already run from St Fergus out to former drilling sites. READ MORE Acorn missed out on support in 2021, when funding instead went to two areas in the north of England. It was instead placed on the Track 2 reserve list for future backing. That means it has little chance of being developed until the second phase in the 2030s at the earliest. If delivered, it could provide a critical lifeline for Scotland's heavy industries. The Climate Change Committee, the UK's statutory adviser on climate policy, has projected that the Scottish cluster could ultimately store between 10 and 22 million tonnes of CO₂ a year by 2050. The project is also intended to help secure a "just transition" for the north-east economy as the oil and gas sector declines. A 2023 impact assessment estimated that Acorn could support 15,000 jobs across construction and long-term operation, with many roles directly reusing skills from the offshore oil and gas sector, which has seen workforce numbers in Aberdeen fall by about a third in recent years. Earlier this year, industry leaders warned that not investing in Acorn could risk thousands of jobs, billions of pounds of investment, and future economic growth. (Image: House of Commons/PA Wire) In a letter to Chancellor Rachel Reeves, Mr Flynn, who is the MP for Aberdeen South, said the omission of Acorn funding was 'another chapter in the same old Westminster story' in which Scotland's energy sector was treated as a "cash cow". He said the Prime Minister's announcement of further funding for projects in England "without mention of finance or progress for the Scottish Cluster' was disappointing. 'The success of this project has been hindered by a failure of consecutive UK Governments to deliver certainty on both licensing and funding. The same damaging trend appears to have continued into your government. 'The simple reality is that if you want to deliver Net Zero, grow the economy and help safeguard energy security then there is no project better placed than Acorn, but it appears that once again Scotland is an afterthought to Westminster. "Business leaders are absolutely clear on this and it's high time the UK Labour Government listened to the evidence and delivered, with the industry in dire need of certainty from a UK Labour Government which has offered nothing outside of confusion and prevarication.' Mr Flynn said the announcement was the 'latest instalment in a litany of Labour Government betrayals of Scottish industry, where investment and key assets move higher up the Labour Party's list depending on which side of the border they are found.' 'There is a growing consensus and conclusion that Scotland is an afterthought to the UK Labour Government and that these latest announcements have been a kick in the teeth to Scottish workers, to our energy sector and to our economy,' he added. READ MORE A spokesperson for the Department for Energy Security and Net Zero defended the government's position, saying ministers 'recognise the value of the Acorn project to Scotland and our wider clean power plan'. They said: 'We are delivering first-of-a-kind carbon capture projects in the UK, supporting thousands of jobs across the country, reigniting industrial heartlands and tackling the climate crisis. 'The Energy Secretary has made clear in Parliament that we recognise the value of the Acorn project to Scotland and our wider clean power plan. Carbon capture requires significant resources, and it is right that it is considered within the Spending Review. 'Alongside headquartering Great British Energy in Aberdeen, we are working with industry on a plan for the next generation of good jobs in Scotland in hydrogen, offshore wind and ports, as part of the government's clean energy superpower mission.' Energy Secretary Ed Miliband told MPs in March that the government remained committed to Acorn and the Scottish Cluster. 'I support the Acorn project, it is really important,' he said. However, the minister added that 'the right time to make decisions will be at the spending review in June.' Energy Security and Net Zero Secretary Ed Miliband (Image: Kin Cheung/PA) The UK is well placed for CCUS projects. There is enough storage capacity for an estimated 78 billion tonnes of CO₂ — more than 200 years' worth of current emissions. However, the technology is expensive. Capturing, transporting, and storing carbon can cost between $50 and $100 per tonne of CO₂. There are also questions over whether or not the first-of-its-kind technology is viable. In February, the House of Commons Public Accounts Committee (PAC) described the technology as a 'gamble' and said they were 'unconvinced that CCUS is the silver bullet Government is apparently betting on' to reach net zero. The UK Government downgraded its ambitions for CCUS in 2024, with a target of storing 20 to 30 million tonnes per year of CO₂ by 2030 now seen as no longer achievable. Last week's announcement came after the UK Government and Italian energy firm Eni agreed a deal for financial support for its Liverpool Bay carbon capture and storage project. The firm said the agreement of financial terms with the UK government will allow the project to move into the construction phase and 'support the UK's industrial competitiveness for the long term'.
