Before we begin, I encourage Members to wear masks when they are not speaking, in line with the current guidance, and also to give people space when moving in and out of the room.
That this House has considered carbon capture and storage.
It is an honour to serve under your chairmanship, Mrs Miller. Two decades ago, when I was environment editor of The Times, a report came across my desk of a new-fangled concept called carbon capture and storage—CCS. I phoned an environment group, whose blushes I will spare, and asked them what they thought. They took a big pause, and then said, “We don’t like it.” I asked them why they did not like it. They said, “Not sure.” A few months later I wrote another article on carbon capture and storage; I phoned the same environment group and asked what they thought. They said, “We’ve worked out why we don’t like it now.”
Carbon capture and storage, more trendily and officially now known as carbon capture, usage and storage, is often seen as a surreal, “Dr Strangelove” type of technology that mad scientists and big businesses have concocted. However, the truth is that carbon capture and storage is natural; it is what nature has been doing for 3.5 billion years. When life on Earth started, the amount of carbon dioxide in the atmosphere was about 4,000 parts per million. First bacteria, then multicellular organisms and then plants started sucking up the carbon dioxide in the atmosphere and burying it. Life sucked trillions of tonnes of CO2 out of the atmosphere and stuck it under ground as coal, as natural gas, as oil, and as carboniferous rocks such as limestone and chalk—the Grand Canyon and the white cliffs of Dover are made of rocks created by life out of the carbon in the atmosphere and then buried underground. Nature has continuously captured carbon dioxide in the atmosphere and stores it temporarily in the biosphere as plant and animal matter, and stores it permanently in the geosphere. [Interruption.]
Order. The Division bell has rung. I understand there might be up to five Divisions. If we can reconvene here as quickly as possible after the final Division, I will start the debate again when we are quorate. I urge Mr Browne to be in his seat quickly after the final Division. It will probably be about an hour.
I will resume where I finished, if I remember rightly. I was saying that nature has continuously captured carbon dioxide in the atmosphere and stored it temporarily in the biosphere and permanently in the geosphere. The process has continued for billions of years, and the amount of atmospheric carbon dioxide fell steadily to 200 parts per million about 20,000 years ago, which was a staggering 95% drop. However, atmospheric carbon dioxide started rising again. By the start of the industrial revolution, it had crept up to 280 parts per million, but in the last century we have reversed natural carbon capture and storage at an astonishing rate as we have dug up the fossil fuels and cut down the trees and stuck the carbon within them back into the atmosphere. Atmospheric carbon dioxide is now at about 420 parts per million—a jump of about 50% in a geological blink of the eye.
The last 10,000 years—the Holocene period in which we live—has been remarkably benign from a climate point of view. Steady, moderate temperatures have allowed human civilisation to flourish, but we are now undoing that. The whole point of the net zero mission is to stop carbon dioxide levels rising further so that we can keep our benign environment.
We can and should promote natural carbon capture and storage. We should plant more trees, restore peatlands and increase the carbon-rich organic content in soil. However, there is only so much land that we can plant with trees, so that can only ever be a small part of the solution. What we are talking about today is therefore industrial carbon capture and storage.
Many people in the environment movement are worried about industrial carbon capture and storage, and some are outright opposed. As chair of the all-party parliamentary group on the environment, I think that those fears need to be taken seriously. We can all agree that we should do CCS only if it is robust and locks away carbon away permanently. Otherwise, there is literally no point. The overriding fear is that CCS will create a moral hazard that means we will give up on other ways to get to net zero, but the UK and other Governments are totally committed to getting to net zero by the middle of the century and there is no scenario in which CCS can get us to net zero on its own. Whatever we do with CCS, we must increase renewable energy production, move to electric vehicles and phase out coal power and gas boilers. That is already happening, as we have seen with the announcements this week.
For complete clarity, we restarted the debate at 5.29 pm, so the wind-ups will start at about 6.05 pm. My maths says that if Members can speak for under four minutes, we will get everyone in—just as a guide.
It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on securing this extremely important debate. I was trying to find something to disagree with him on, and I struggled to do so.
I am absolutely delighted, with my Teesside and Humber colleagues, that we will be at the forefront of Britain’s carbon capture, utilisation and storage plans as part of the east coast cluster. I have long made the case that Teesside should be the home of the first cluster, because it offers the best opportunity to decarbonise industry of anywhere in the UK. With the east coast cluster, as everybody now knows, almost 50% of the carbon emissions in the UK could be removed.
I set up the all-party parliamentary group on carbon capture, utilisation and storage about seven years ago, when it was not exactly fashionable to talk about it. We wanted to ensure that the Government recognised the importance of CCUS in achieving net zero. To her credit, the former Energy Minister Claire Perry got on board, but she was badly let down by her Government and the then Chancellor, George Osborne, who at the stroke of a pen the night before Budget day set the industry back several years. Had he not stripped away £1 billion pounds of funding that dark day, we would already have a maturing carbon capture and storage industry and a much cleaner environment.
However, we are where we are, and we need to get on with the job. The east coast cluster will make huge inroads in cutting emissions, and I am extremely pleased about the economic possibilities that the cluster presents for our area. We cannot afford for the Government to let us down again; we must ensure that this time we get the project over the line. There is simply no time left. Industries are already struggling and if further action is not taken soon, they will be unable to continue and we will fail to meet our environmental targets.
It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate my hon. Friend the Member for South Cambridgeshire (Anthony Browne) on securing and leading this important debate, shining a spotlight on the exciting prospects posed by carbon capture. This new technology will play a vital role in tackling climate change and reaching our net zero target by 2050.
The Government have already invested heavily in ensuring that carbon capture is used across the country. That is abundantly clear in Tees Valley, and I am grateful to the hon. Member for Stockton North (Alex Cunningham) for welcoming the Government’s steps there. Only yesterday, it was announced that the east coast cluster has been selected by Ministers to develop carbon capture facilities. I was delighted to learn that Net Zero Teesside, which will be based at Teesworks, will receive a share of the £1 billion carbon capture and storage infrastructure fund. That will enable the creation of the new common infrastructure needed to transport CO2 from industrial plants across Teesside to secure offshore storage in the southern North sea.
Championed by our phenomenal local mayor, Ben Houchen, and spearheaded by local industry, the carbon capture cluster will remove 50% of the UK’s industrial cluster CO2 emissions and support our national energy transition to achieve our net zero target. The project will capture 10 million tonnes of carbon—the equivalent of that produced by 3 million homes, while creating 25,000 skilled jobs by 2050 in a variety of sectors from construction to low-carbon technology. It is essential that the Government continue to invest in exciting technology to achieve their 2050 net zero target, and I welcome the steps already being taken in Teesside.
The support of the Government is immense and I am grateful for it. However, we cannot ignore the vital role that the private sector will play in assisting our energy transition. In Darlington, we have the excellent Cummins engine manufacturer, which will continue to build on Darlington’s proud engineering history as it develops a hydrogen engine. With £14.6 million of Government-backed funding through the Brunel project, the carbon-free engine will revolutionise our road haulage sector and stop 11 million tonnes of carbon going into the atmosphere.
I am grateful to the hon. Gentleman for giving way. My father worked for the Cummins engine company for 40-odd years. That was almost next door to the Cleveland Bridge & Engineering Company, which has now gone to the wall. Does he agree that that was a great sadness, and that the Government let the company down?
I am grateful for that intervention. Having worked extensively with the administrators, local government and the unions in respect of Cleveland Bridge, I assure the hon. Gentleman that every step that could have been taken to save that business was taken.
In conclusion, Darlington and the wider Tees Valley were there at the beginning of the first industrial revolution. Once again, we are centre stage in the clean, green revolution as we stride towards net zero, which carbon capture is central to.
Thank you very much for chairing this meeting, Mrs Miller, and huge thanks to the hon. Member for South Cambridgeshire (Anthony Browne) for securing the debate. I have to agree with my colleague, the hon. Member for Stockton North (Alex Cunningham)—the hon. Member for South Cambridgeshire made a number of excellent points. I would only disagree with one, and that is the number of jobs he said would be created as a result of carbon capture and storage. In fact, it was a drastic underestimation, given that the Scottish cluster would support an average of 15,000 jobs a year to 2050—many of which are direct jobs, with a number of indirect jobs—and that is an average. That is a significant number of jobs that would be supported by just that one project.
It was decided yesterday that the Scottish cluster will be a reserve cluster, rather than one that will be progressed in track 1. That is hugely disappointing. As the hon. Gentleman noted, successive UK Governments have previously pulled the rug out from under carbon capture and storage. What was done to us in relation to Peterhead makes this feel like another kick in the teeth, particularly when the Government have been clear that the Scottish Acorn cluster project has met all the criteria for going ahead. It is just an arbitrary decision that only two are going ahead, rather than three.
The Scottish cluster is ready to go. We can make the track 1 timetable. The Government have accepted that we meet all the criteria. I do not understand why the Government have taken this decision in the face of the Climate Change Committee’s recommendations about how much carbon capture is needed to meet our climate change obligations, or even in order to meet the Government’s own climate change obligations.
I have been working alongside Acorn and Pale Blue Dot for a significant number of years. This morning, I spoke with poor Charlie, who works at Acorn, who must be fed up of seeing my face on Zoom meetings and in person, because we have met so often over such a number of years. I have been and continue to be a champion of the Scottish cluster for many good reasons. It has the potential to capture 60% of the UK Government’s 2030 targets. It is forecast to deliver 1.3 gigawatts of low-carbon hydrogen by 2030. Under the existing memorandums of understanding, it has a diverse group of 10 CO2 customers, which meet more than 60% of the Government’s target. It will also reliably unlock 30% of the UK’s CO2storage resource, which is absolutely huge.
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What CCS can do is enable us to transition to net zero more quickly and at far lower economic cost. Do not just take my word for it: the UN’s Intergovernmental Panel on Climate Change and the UK’s Climate Change Committee both see carbon capture and storage as essential for reaching net zero. The CCC’s sixth climate budget declared that CCS was a necessity, not an option, and that the UK needs to capture between 75 million and 180 million tonnes of carbon dioxide a year by 2050, starting off with 22 million tonnes by early 2030, which is just nine years away.
CCS is currently the only technology we know of that can significantly decarbonise industries such as steel, cement, glass and chemicals. Unless we go back to the middle ages, we will still need those industries, and only CCS can ensure that we get to net zero without forcing those industries overseas, which would just export our pollution and lose us jobs. CCS can help produce low-carbon hydrogen that can power carbon-neutral boats, trucks and trains, and other industrial processes. CCS can also cut the cost of getting to net zero, which is an issue of rising political concern. The International Energy Agency has estimated that the cost of tackling climate change will be 70% higher without CCS.
There are various offshoots of CCS. The normal CCS will not reduce the amount of carbon dioxide in the atmosphere; it will just dramatically slow down the increase. But there are technologies that will reduce the level of carbon dioxide in the atmosphere: greenhouse gas removal. Biomass energy with carbon capture and storage—BECCS—is one being piloted by Drax, and direct air capture is another. Greenhouse gas removal could help mop up residual emissions that are otherwise impossible to eliminate, but BECCS has become controversial in the environment movement partly because of concerns about how sustainable it is to grow the biomass. That must be addressed. There is also concern about the carbon accounting from BECCS: when we import biomass from other countries, we are taking credit for carbon captured in another country. That is a valid criticism, but it is an argument about adjusting our carbon figures rather than giving up on BECCS.
Last year, I hosted virtually the global launch of the Coalition for Negative Emissions, bringing together stakeholders from around the world who are interested in removing greenhouse gases. The potential impact is enormous, particularly if economies of scale mean that the costs of removing a tonne of carbon dioxide come down. I therefore welcome the Government’s announcement yesterday, in the net zero strategy, that they will target greenhouse gas removal of 10 million tonnes a year by 2030, and that they will amend the Climate Change Act 2008 to include engineered CO2 removals. That might be controversial among some environmental groups, but it is simply irrational and unscientific to include CO2 molecules removed from the atmosphere by a tree but not those removed by humans.
I have participated in many debates on CCS, and normally at this stage someone says that we should not support it because it is an unproven technology, but that is not true. The science is actually quite straightforward: it is stripping carbon dioxide out of the emissions from power plants and factories, liquifying it, transporting it by pipeline or boat, and then storing it. Most aspects of this are already done. For example, there are already 8,000 km of pipeline carrying CO2 around the US for industrial use.
The storage point is more complex. It needs to be stored permanently, and the preferred place to do that is in geological formations, up to 3 km below the surface of the earth. One such perfect place to do that is under the North sea, where natural gas and oil have been stored by nature safely for millions of years without leaking out. Again, this is not untried technology. The first commercial CCS site in the world was opened in 1996, some 25 years ago, at the Sleipner gas field between Norway and Scotland. Since then, it has been taking 1 million tonnes of CO2 out of emissions every year and sticking it a kilometre underground. That single CCS plant has reduced Norway’s greenhouse gas emissions by 3%, compared to what they would otherwise have been. That site is monitored closely and there has been no leakage. The Global CCS Institute, a US think-tank, now reports there are 26 operating CCS facilities worldwide in the US, China, Australia, the middle east, Canada and Europe.
However, it is true that CCS is untried and untested technology in the UK. We do not have CCS yet— we have fallen behind. That is why I welcome the announcement yesterday that the Government are pushing ahead with two new CCS clusters at HyNet North West and the east coast cluster. I look forward to hearing more from the Minister and colleagues about that.
There are lots of very powerful reasons why the UK should lead on CCS. The UK has a particular national advantage when it comes to CCS, and CCS could bring particular benefits to the UK. Our oil and gas industry means we already have the skills and infrastructure to develop CCS. As gas and oil extraction declines, CCS can take over. It is estimated that rolling out CCS will save 50,000 jobs in industries such as steel, cement, chemicals, ceramics and glass, and CCS can become a sector in its own right, creating 10,000 more jobs. The ideal locations for these jobs would be in the former industrial heartlands of north-east Scotland, Teesside, Humberside, south Wales and Merseyside. There could be no better example of levelling up.
We have the natural geological features. We have as much carbon storage capacity underground as the rest of the EU combined. Many European countries will not be able to do their own CCS, as they have neither the geology nor the industry, and this creates a huge export opportunity for the UK, capturing carbon dioxide and burying it underground on behalf of other countries. The UK is not doing any CCS yet, but we are almost uniquely positioned to be a CCS superpower.
The creation of a CCS industry is not going to happen by itself. We have companies that can develop CCS, but they have no financial incentive to do it. They are not going to invest billions of pounds only to find out there is no possibility of generating revenue. What they need is a predictable, long-term regime that makes CCS commercially viable, and that is the lesson from Sleipner in Norway. That was not built as a loss-making experiment; it was the result of a commercial decision by the Norwegian state oil company, now Equinor, to avoid paying carbon taxes by burying the carbon instead.
In the UK, we know how to set up regimes to nurture the creation of a new industry. We did it with offshore wind power. By setting up the contracts for difference regime, the Government facilitated the creation of a world-leading power industry that has worked better than almost anyone dared to dream. Costs have fallen so much that it has become competitive and wind now produces more electricity than any other source.
The good news is that this Government are committed to CCS, more than any previous Government, and I strongly commend them for it. They underlined their commitments in last year’s 10-point plan for climate change, promising to invest £1 billion a year in the technology. They reinforced that commitment yesterday with the announcement that they are moving ahead with support for the first two CCS clusters. They also raised their ambition, which was a surprise to me, saying they wanted to capture 20 million or 30 million tonnes of CO2, up from just 10 million tonnes, which was the previous announcement, bringing the amount in line with what the Committee on Climate Change says is needed.
This is all welcome news, but it would not be much of a debate if I just said that the Government are doing everything perfectly. Indeed, I have some asks, although the announcements yesterday address some of them. My first ask is simply this: please keep calm and carry on. In 2007 and 2012, the Government launched competitions for CCS, but in both cases they subsequently cancelled them. That was so damaging to confidence in the industry. Such a stop-start approach risks repeating the mistakes of nuclear. Where once we were a world leader in nuclear power, successive Government wavering over decades meant that we ended up dependent on other countries. On CCS, will the Government please have the courage of their convictions?
My second ask is that the Government support CCS in next week’s spending review. Given yesterday’s announcement, I presume that that is a foregone conclusion. The Carbon Capture and Storage Association states that its members can reach the 10-milion tonne removal target for a maximum cost of £1.2 billion a year—that target has now gone up to 20 million tonnes, so the big question is whether it can still be done for £1.2 billion. That is about one quarter of the peak annual subsidy that launched the wind power industry, so as economies of scale kick in for renewables and as subsidies decline, they can be redirected to CCS.
My third ask is that the Government produce a long-term financial structure for the industry, so that companies can invest with certainty. That is the biggest ask of the industry. The levy control framework was a huge success for offshore wind, largely because it gave companies a 10-year funding horizon, within which they knew the revenues that they could make. That gave companies the confidence to invest at scale.
Yesterday, the Government announced the industrial decarbonisation and hydrogen revenue support or IDHRS scheme. That is very welcome, but I understand that it is only for the current spending review period and that the first two CCS clusters announced yesterday will not be operational within that time. Therefore, I would welcome confirmation of how the Government will ensure that CCS clusters have sustainable revenue once they are operational. If the CCS funding is subject to three-year spending review horizons, rather than a 10-year horizon, businesses will be reluctant to invest in the sector as much as they otherwise would. The Government should give CCS the same long-term certainty that they previously gave wind power.
My fourth ask is that the Government should set out a long-term vision for the development of CCS—we had a taste of that yesterday—for it to become a fully competitive, financially sustainable sector. That is a vision that would go above and beyond the clusters it would initially fund. To reap the full benefits of CCS, practice needs to be embedded across industry and the country. The Government need to establish a fully functioning market for carbon in the UK now that we have left the European emissions trading scheme.
My fifth ask is about the need for independent monitoring of the CCS clusters that go ahead. Environmental groups will rightly be looking like hawks for signs of any leakage of CO2 out of the ground, or for game-playing by the industry. CCS companies cannot be allowed to mark their own homework. We also need clarity on the Track-2 process as soon as possible, to keep up momentum in the industry. I also urge the Government to look at the 1 GW hydrogen target as a minimum, because industry feels that it could do far more than that, which would be welcome.
Finally, I have a request to make of environmental groups. We all agree that tackling climate change is the most important challenge we face. Yes, they must hold Government and industry to account, but for all our sakes they should please not start campaigning against CCS itself. Let the debate be driven by science, not other motives. Rather, they should work with the Government and industry to ensure that CCS plays the vital role in getting to net zero that the IPCC and CCC expect of it.
The Government are committed to supporting CCS. They must now ensure that the UK is no longer left behind, but can reap all the environmental and economic benefits of becoming a CCS superpower. We did it with wind power and we can do it with CCS. We can deliver another great green success.
Earlier today I attended an energy-intensive industries roundtable on energy prices and listened to Debbie Baker from CF Fertilisers—the company in my constituency that found itself at the centre of the recent carbon dioxide crisis. It has huge energy costs, huge gas transportation costs and huge carbon costs as well. It desperately needs the Government to take action in those areas. I hope that the Minister will recognise that it will take a wee while before we get the CCUS infrastructure in place, so it is critical that other action is taken in the shorter term to ensure that we do not lose companies such as CF Fertilisers and those in other energy-intensive industries in my area and across the country.
The hon. Member for South Cambridgeshire talked about keeping calm and carrying on, and that is critical. He covered the issue of spending and the need for the right funding regime, and I agree with him on that. I hope that the Minister will take some time to outline how the funding mechanism will work to give us that clarity. I am pleased with what the Government are doing. I will not get many pats on the back from some colleagues for saying that, but I am pleased because it will make a difference for Teesside. I hope that the Government will ensure they deliver on that this time.
I see absolutely no reason why the Government have chosen only two clusters. I am not criticising the fact that the Government are finally proceeding with CCS— I think that is great. However, it seems so arbitrary and deeply unfair that the Scottish one has been put in reserve, given that it is ready and given that we can progress it right now. I would love the Minister to answer why the Government have chosen to progress only two and, if they continue to progress only two and not move to three, how they will meet the storage obligations. How will they meet the carbon capture suggestions made by the Climate Change Committee, which the UK Government have said they will do? How will they meet those targets if they do not progress the Scottish cluster?