Carbon Capture and Storage Infrastructure Fund

Lord Callanan Excerpts

Monday 16th October 2023 Lords Chamber

[Baroness Jones of Moulsecoomb]

To ask His Majesty’s Government how much of the Carbon Capture and Storage Infrastructure Fund they have awarded in contracts to companies involved in the oil and gas industry.

[The Parliamentary Under-Secretary of State, Department for Energy Security and Net Zero (Lord Callanan) (Con)]

My Lords, no contracts have yet been awarded through the cluster sequencing process. The amount that may be awarded to individual projects is still subject to negotiations. Project sponsors are from a range of industries including cement, industrial gases, energy from waste, et cetera. In addition, up to £40 million of the CIF is being spent under the UKRI industrial decarbonisation challenge fund, which aims to deliver significant reductions in industrial carbon dioxide emissions.

[Baroness Jones of Moulsecoomb (GP)]

That is sort of good news, because I hope that this Government are not going to give any of that funding to fossil fuel companies, or to any other industry that has not only had tax breaks in the past and made massive profits but trashed the planet knowingly. Will the Minister give me any sort of promise that fossil fuel companies will not be entrusted with this sort of technology, which is already considered very risky and ineffective?

[Lord Callanan (Con)]

No, I will not give the noble Baroness that assurance, for a number of good reasons. First, in the real world, as opposed to in the noble Baroness’s fantasy green world, CCUS is an essential technology.

[Noble Lords]

Oh!

[Lord Callanan (Con)]

The Climate Change Committee has said that CCUS is essential and not an option if we are to meet our net-zero goal, which we wish to do. Secondly, in a number of industries—cement and energy from waste, et cetera—CCUS is the only option to decarbonise those industries. Unless the noble Baroness is saying that she wants them all to close down, so that we have no building in this country and import all our cement from overseas, what is her practical solution in the real world to delivering these technologies?

[Baroness Jones of Moulsecoomb (GP)]

I will send the Minister a manifesto.

[Baroness Northover (LD)]

My Lords, the Minister has just confirmed that no commercial plants are yet operational in Britain. Is the Government’s plan to capture 20 million to 30 million tonnes of CO₂ by 2030 not therefore unachievable? Why are the Government subsidising this with £1 billion, at the expense of proven renewables?

[Lord Callanan (Con)]

It is not one or the other; we need to do both. Of course we need to push ahead with renewables, and I have set out many times in this House how well we are doing. Almost 60% of electricity in the last quarter was delivered by renewables, but CCUS is also essential. We have committed £20 billion-worth of funding to CCUS over the next few years because everybody thinks it essential to meeting our goals. It also offers a massive export opportunity for this country, as we have expertise in many of these technologies. The estimate is that capturing 20 million to 30 million tonnes of CO₂ by 2030 could deliver up to 50,000 jobs, many of them in our industrial heartlands.

[Baroness Blake of Leeds (Lab)]

My Lords, the Government have only recently entered negotiations with track 1 clusters, despite the climate investment fund being announced three years ago. They have earmarked £0.3 billion of the £1 billion fund for this financial year. This does not leave much time for negotiating. Are the Government concerned that this deadline, caused by their own delays, will impact on their negotiating position? Is the Government’s priority using this money well or simply using it?

[Lord Callanan (Con)]

My Lords, this makes me think that we cannot win on this. One part of the Opposition does not want to award these contracts at all and the Labour Party thinks we should have done it earlier. The reality is that we are proceeding with negotiations. It is our aim to have the contracts let for the first 10 projects by quarter 3 of next year. This is a really exciting technology, but we need to do the negotiations properly and get maximum value for money for the taxpayer from what is an emerging new industry.

[Lord Geddes (Con)]

Can my noble friend bring the House up to date on the Government’s support for tidal power?

[Lord Callanan (Con)]

My noble friend is dogged in his pursuit of this, and I have answered his question before. As he knows, under the last contracts for difference round, a number of tidal projects were successful in receiving funding.