The UK Government’s carbon capture, usage and storage (CCUS) strategy is based on optimistic techno-economic assumptions that are now outdated and unrealistic, according to a new report from financial think tank Carbon Tracker.
The report Curb your Enthusiasm, published on 13 March, finds that the UK’s current CCUS strategy, which has become a key pillar of its already controversial net zero plans, risks “locking consumers into a high-cost, fossil-based future, despite cleaner and cheaper alternatives being available”.
Carbon Tracker’s analysis of global CCUS projects suggests that the technology has a history of “over-promising and under-delivering,” lacking evidence of cost improvements, scalability and applicability in key sectors remaining untested and costly.
In his 2023 Spring Budget, Chancellor of the Exchequer Jeremy Hunt pledged £20bn over the next 20 years to develop CCUS technology in the country. In December, the UK’s Department for Energy Security and Net Zero laid out a plan for a new domestic CCUS market by 2035, backed by Hunt’s funding pledge.
The plan, dubbed CCUS Vision, will aim to encourage competition and drive down costs in the industry. It also has a target to capture 20-30 million tonnes of CO₂ per year by 2030. The strategy was based on the recommendations of the UK’s Climate Change Committee (CCC), published in The Sixth Carbon Budget in December 2020.
But Carbon Tracker’s latest report finds that cost estimates for deploying CCUS have more than doubled since 2020. The need for carbon capture has also decreased due to the growth in renewables and battery storage technologies.
The report’s authors argue that plans to use CCUS to decarbonise industrial processes such as steel production and gas-fired power production should be abandoned, with both applications likely to be out-competed by cleaner alternatives in the near future.
Tata Steel and British Steel are already moving away from plans to install CCUS at their UK facilities in favour of a move towards electric arc furnaces, which can be powered by renewables. Hydrogen turbines are also likely to be cheaper sources of flexible power generation than gas plants with CCUS by the end of the decade.
Carbon Tracker associate analyst and report author Lorenzo Sani said: “CCUS technology has proven to be much more complex and expensive than thought, while renewables cost reductions have dramatically changed the landscape.
"While the government is playing an important role in de-risking new projects it urgently needs to revisit its targets and focus its resources on high-value applications such as cement and hydrogen.”
The report also looked at power company Drax’s recently announced plans to attach CCUS facilities to its large-scale biomass plant in North Yorkshire, a move that would be heavily funded by the government and could cost billpayers up to £43bn, according to climate think tank Ember. Carbon Tracker’s report also finds that the Drax CCUS project could lock taxpayers into a long and costly contract, with the electricity produced costing consumers up to three times more than offshore wind power.
Australian billionaire and mining magnate Andrew Forrest said in an emailed comment: “The science on carbon capture and storage is loud and clear: it is a dangerous distraction that is high risk, high failure and high cost.
“For evidence, look at every recent project globally, in the USA, Australia and Norway: Gorgon, Klemstrud, Project Bison, Shute Creek, Boundary Dam. All of them have failed catastrophically due to cost blowouts and technical challenges… It is time to let go of the delusion that carbon capture and storage works. Business as usual will not stop global warming, only green energy can.
"Storing CO₂ underground, even if it worked, would also set humanity up for an even greater disaster. The science shows that we will see catastrophic and gradual leakage of carbon dioxide, an increase in earthquakes and ocean acidification and contamination of our drinking water with heavy metals.”
