Written Statements

Wednesday 13th November 2024 Written Statements

Wednesday 13 November 2024

Carbon Capture, Usage and Storage

Wednesday 13th November 2024 Written Statements

[The Minister of State, Department for Energy Security and Net Zero (Sarah Jones)]

Today, I am pleased to have laid a departmental minute setting out the details of a series of contingent liabilities associated with the carbon capture usage and storage track-1 clusters. Carbon capture usage and storage is a critical component of the UK meeting its 2050 net zero commitment particularly via ensuring energy and supply chain security and enabling hard-to-abate sectors to decarbonise.

The taking of these liabilities directly will address issues which have hampered previous attempts at a carbon capture usage and storage programme, in particular investor confidence and the risk of CO₂ store leakage. This support and the rapid launch of the programme fulfils the Government’s aim to make the UK a global leader in carbon capture usage and storage, and ultimately creating a self-sustaining sector which supports not only UK business but also provides international opportunities.

Treasury approval has been granted and subject to satisfaction of conditions, we anticipate arrangements will begin to be implemented by the end of this month.

Context and rationale

Carbon capture usage and storage is the only feasible method for decarbonising many hard-to-abate sectors such as cement production, and is currently the most cost-effective method of decarbonising others, such as dispatchable power. While there is growing interest worldwide, a programme of this nature is first of a kind and consequently there are multiple market barriers which inhibit the development of a carbon capture usage and storage market in the UK.

Government support is necessary to address these challenges and enable carbon capture usage and storage deployment at scale. HMG is reducing investor risk in these technologies by bearing some of the initial risk inherent in developing a carbon capture usage and storage market, as well as the cross-chain risk existing across the participants in the network.

While the liabilities are in principle for the entire project duration, it is expected that in practice Government exposure will decrease as users come on to the system, insurers become more comfortable with the “first-of-a-kind” risks, and the depth of the market increases.

Details of the contingent liabilities

There are five contingent liabilities associated with the various track 1 contracts related to the following arrangements:

1. The supplemental compensation agreement is a long-term mechanism within the Government support package, which enables the management of leakage risks at the geological store during operations and the post closure period.

2. The revenue support agreement addresses demand-risks by providing for payments to CO₂ transport and storage companies if their allowed revenue is not covered by user fees.

3. The discontinuation agreement provides a right for the SoS to discontinue support to the transport and storage companies and entitles investors to be compensated for their investment.

4. The decommissioning shortfall agreement covers potential decommissioning fund shortfall which might arise if decommissioning is required before the fund has been fully built-up.

5. The discontinuation of capture project contracts allows for payment of compensation to capture projects for any losses due to a qualifying change in law or prolonged CO₂ transport and storage unavailability.

Exposure

The table below sets out the HMG’s maximum exposure for each of the programme-associated contingent liabilities. These concern the five projects that were part of the October announcement: two transport and storage networks, Net Zero Teesside, Protos, and EET Hydrogen. We will notify Parliament of additional contingent liabilities when other projects reach financial close. It is important to note that while the table represents the maximum possible exposure, the probabilised exposures and likely crystallisations are far lower. There are robust risk management frameworks in place. Our assessments indicate that there no liabilities that are likely to be realised and the vast majority are very remote.

Flood Resilience

Wednesday 13th November 2024 Written Statements

[The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Emma Hardy)]

The Government extend their deepest sympathies to the citizens of Valencia and more widely across Spain, where recent floods have had devastating impacts on communities, including the tragic loss of more than 200 lives. These events are a stark reminder of the challenges we face in a changing climate.

This Government set up the first ever Floods Resilience Taskforce, on 12 September. The taskforce marks a new approach to preparing for flooding, and working between national, regional and local government. It brings together Ministers and stakeholders, including DEFRA, MHCLG, Home Office, Cabinet Office, mayoral offices, the Environment Agency, the Met Office, devolved Administrations, local resilience forums, emergency responders, and the National Farmers Union, among others.

As announced at the autumn Budget 2024, the Government will invest £2.4 billion over two years to improve flood resilience and better protect communities across the country, including from coastal erosion.

But this Government inherited an outdated funding formula for allocating money to proposed flood defences. Established in 2011, the existing formula slows down the delivery of new flood schemes through a complex application process, and also neglects more innovative approaches to flood management such as nature-based approaches and sustainable drainage.

To speed up the delivery of new defences and ensure that the challenges facing businesses and rural and coastal communities are adequately taken into account, a consultation will be launched in the new year which will include a review of the existing formula. We also want to ensure that floods funding policy drives close partnership working and brings in wider financial contributions to flood schemes, to make Government funding go further.

Additional financial support will also be provided to rural communities, recognising the significant impact of flooding on farmers, and £50 million will be distributed to internal drainage boards—the public bodies responsible for managing water levels for agricultural and environmental needs in a particular area.

This transformational investment will put IDBs on a firm footing to deliver their vital role in flood and water management for years to come. IDBs that submit successful bids will be able to spend the £50 million on projects over the next two years. This will benefit projects that will improve, repair or replace IDB assets, including flood barriers, embankments and maintenance of watercourses. The funding will support projects which reduce risks and impacts from flooding to farmer and rural communities across England. The Environment Agency has begun work with IDBs to distribute the funding from today.

This follows confirmation of payments to farmers impacted by last year’s severe weather through the farming recovery fund. A total of £60 million will be distributed to eligible farmers, via recovery payments of between £2,895 and £25,000 to around 13,000 farm businesses. Payments are expected to land in farmers’ accounts from 21 November.

Taken together, the measures announced today will deliver meaningful change for communities across the country. They represent a significant package of funding and a promise of reform which show that this Government will continue to act to ensure people are better protected from flooding right across the country.

[HCWS214]

Ninja Swords

Wednesday 13th November 2024 Written Statements

[The Minister for Policing, Fire and Crime Prevention (Dame Diana Johnson)]

As part of the Government’s aim to halve knife crime within a decade, we have a manifesto commitment to ban ninja swords and we will be making the relevant changes in secondary legislation. In preparation for this, today we are launching a public consultation to seek views on the legal definition of ninja swords and any associated defences to help with the planned legislation.

The consultation will run for a four-week period and provides an opportunity for the public to have their say.

A copy of the consultation and related options assessment will be placed in the Libraries of both Houses and published on gov.uk.

[HCWS213]

Weapons: Illegal Digital Content and Senior Executive Liability

Wednesday 13th November 2024 Written Statements

[The Minister for Policing, Fire and Crime Prevention (Dame Diana Johnson)]

As part of this Government’s aim to halve knife crime within a decade, the Government have a manifesto commitment to establish personal liability measures on senior executives of online platforms and marketplaces that fail to take action to remove illegal content relating to knives and offensive weapons. Today we are launching a consultation to test views on how this commitment will be implemented in new legislation.

The consultation will run for a four-week period and provides an opportunity for the public to have their say.

A copy of the consultation and related options assessment will be placed in the Libraries of both Houses and published on gov.uk.

[HCWS212]