Written evidence submitted by Oil Change International (CCUS0012)

OCI is a research, communications, and advocacy organisation committed to raising awareness of the true costs of fossil fuels and promoting a global transition to clean energy.

A global perspective: CCUS’s decades-long history of failure

1. The 2024 Labour Party manifesto promised that the party would “provide leadership at home so we can influence others to ensure every country plays their part in meeting our collective obligations” in the energy transition.[1] To achieve this, the new UK government must support a just transition away from fossil fuels. Continued investment in CCUS is counter-productive to this goal, and takes valuable time and money away from the real solutions.
2. CCUS has extremely high costs, with few benefits. US$83 billion has been invested in CCUS worldwide since 1990 alone,[2] with US$30 billion in state subsidies used to date.[3] With all of this investment, even if all current projects were functioning as planned, they would only capture 0.14% of global emissions.[4] In reality, the actual capture rate is far below that (see point 4).
3. CCUS is an unproven technology across the globe. The Intergovernmental Panel on Climate Change (IPCC) ranked CCUS as among the least effective and most expensive ways to meet 2030 climate targets,[5] while research from Oxford University estimates that high-CCS scenarios will cost governments US$30 trillion more globally.[6] The EU’s CCUS plans could cost €520 billion[7] - over three times the EU’s total payment budget in 2022.[8] As well as enormous costs, CCUS projects have a record of failure; 80 percent of CCS projects over the past 30 years have been put on hold or abandoned completely.[9] In light of this, it is highly unlikely that the UK alone will be able to build the equivalent of current total global CCUS capacity (50 megatons CO2) by 2035. Indeed, as the National Audit Office (NAO) shows,[10] even the large subsidies already announced for Track-1 would not meet the government’s CCUS targets.
4. CCUS does not work as suggested. While industry claims and scenarios (including for projects in the UK like the Peterhead gas-fired power station) often assume that CCUS captures 90-95 percent of the emissions from installations it is attached to, no CCUS project in the world has managed a capture rate of more than 80 percent, with many capturing much less.[11] New projects would therefore have to achieve never-before-seen capture rates to play a role in a future low-carbon society. In addition, research from Imperial College found that capture rates were overstated by as much as 30 percent.[12] For these reasons, the IEA has downgraded its expectations for CCUS in future net-zero energy scenarios, concluding that “the history of CCUS has largely been one of underperformance.”[13]
5. CCUS carries serious risks to people and the environment. Despite there being relatively little CCUS infrastructure in operation today, there have already been mass CO2 poisoning events related to a pipeline leak in Mississippi,[14] with other leaks leading to hospitalisations and shelter-in-place orders.[15] Monitoring of CO2 storage will have to continue indefinitely, raising serious issues of liability for costs, leakages, or future challenges. Meanwhile, steel corrosion is already putting the first commercial CCUS projects in the USA at risk.[16] Underwater CO2 storage monitoring will require regular seismic blasting, threatening marine ecosystems and particularly marine mammals.[17] There are numerous risks to oceans from offshore CO2 infrastructure, including leaks contributing to ocean acidification.[18] Meanwhile, CCUS’s future water footprint could double global water usage.[19]
6. CCUS diverts resources from real climate solutions to fossil fuels. Hundreds of billions of dollars of taxpayer’s money have been pledged by governments worldwide to support CCS,[20] with over £20 billion pledged by the British government. Yet the IPCC has made clear that its potential represents a small fraction of what is necessary to achieve climate stability.[21] Efficiency, electrification, and increased renewable energy are the primary proven technologies capable of reducing emissions effectively. Focusing government resources on these will have a far greater impact at a lower cost than subsidizing unproven carbon capture.

Unrealistic and dangerous CCUS plans in the UK

7. When the Prime Minister says that the country is in “an economic black hole,”[22] spending limited resources on a failed technology cannot be justified. As the Public Accounts Committee previously scrutinised, the UK has already used £168 million between 2012 and 2016 on two CCUS projects that failed to materialise. In the period 2021-2024, the UK’s CCUS subsidies were the seventh highest in the world, but British projects have followed a familiar pattern for CCUS globally, with delays and soaring prices,[23] given unrealistic and outdated assumptions that underestimated costs by 50 per cent or more.[24] As the NAO report summarises, DESNZ has already reduced its expected CO2 storage capacity for Track-1 projects. Despite these discouraging developments, the government has already spent £630 million on its CCUS programme according to the NAO,[25] yet there is not one operating CCS project in the UK to this day.  DESNZ’s reliance on CCUS to meet net zero targets has increased without corresponding changes to CCUS projects or greater clarity over funding commitments. This strongly suggests a mismatch between the rhetorical role CCUS plays (in giving the impression of climate action) and the actual impact it can realistically be expected to have on future climate targets.
8. No commercial-scale CCUS projects exist in the UK today. Despite this, currently planned projects revolve around multi-source CCUS ‘hubs’ at an unprecedented scale and level of complexity. With DESNZ’s approach requiring “separate negotiations across different sectors each with its own business model,” this introduces new, difficult-to-predict risks (as pointed out in the NAO report[26]). It is no surprise that none of the Track-1 projects have reached FID.
9. As the NAO’s recommendations imply, there is no credible, achievable timeline for CCUS projects currently planned in the UK. Even if these projects were to succeed where so many much smaller, less complicated projects have failed, CCUS projects take so long to complete (at least six years according to the Global CCS Institute[27]) that it is not realistic to suggest they could support the UK’s 2030 carbon reduction targets, let alone meet the schedule for being ready by the mid-2020s as per DESNZ’s ambition. As the NAO also pointed out, the (highly uncertain) maturing of the already-identified projects brings “a new and significant set of risks,” especially as-yet unresolved fundamental technical obstacles for all parts of the CCUS process. The NAO found some risk can “only be partly mitigated,” further escalating costs.[28] 

10. Fundamentally, the NAO’s conclusion on value for money is contradicted by previous experience with CCUS. The NAO stated that “the government will extract greater value for money from the first wave of projects if it ensures lessons are captured, both in terms of the negotiation process and technologically, to enable costs to come down in future, as has been the experience for offshore wind.”[29] As the previously mentioned Oxford University research found, there is no evidence to date of technological learning or cost reductions along the CCUS value chain. This is because (as Carbon Tracker put it) “CCUS technology features very low levels of modularity and often requires costly custom engineering, which results in a limited level of learning rates and cost reductions.”[30]
11. Given the risks and insecurities associated with the technology, CCUS can neither be relied upon to meet climate targets, nor to support workers’ security in a just transition. When asked about their priorities for the energy transition, offshore oil and gas workers named job security as the most important factor when considering a new industry.[31] Today, CCS makes up only 0.003% of employment in low carbon and renewable energy sectors.[32] Meanwhile, ammonia used in CCUS and the risk of CO2 leaks are serious work hazards.
12. For the third time, CCUS is being proposed at Peterhead, Scotland, with the prospects for the project looking as bleak as in previous attempts. Norwegian state-owned energy company Equinor and Scottish-based SSE have applied for planning permission from the Scottish government to build a new fossil gas power station with CCS in Peterhead. While the new station was initially touted as a replacement for an old SSE gas power station, the company now intends to operate both, meaning there will be no net emissions reduction. Meanwhile, evidence suggests that lifetime emissions from the plant will be three to five times more than reported by the developers.[33] The new CCS facility’s transport and storage depends on the precarious Acorn Project, which is neither under construction nor within the planning system. Furthermore, employment provided by the new power station will be, in the developers’ own words, “not significant,” sustaining just 50 jobs once in operation.
13. Research shows that the Net Zero Teeside CCUS project could produce 20 megatonnes (Mt) of additional CO2,[34] rather than resulting in reductions.
14. Gas-CCS projects are included in several proposed CCUS initiatives in the UK, despite the technology only previously being used in two small pilot projects.[35] When accounting for upstream emissions from gas extraction, Carbon Tracker’s calculations show that new gas-CCS plants will only reduce emissions by 76% (using the average upstream emissions of UK gas consumption in 2022) compared with unabated gas power stations, even when assuming an unprecedented 90% CCUS capture rate.[36] Potential emissions reductions would be even lower (as low as just 33% if using high emissions sources from the USA) in a likely future scenario in which the UK relies more on imported LNG. Carbon Tracker also found that building all gas-based CCUS projects in the UK Net Zero strategy by 2035 would use up 22-63 percent of the Sixth Carbon Budget over their lifetimes.[37]
15. Blue hydrogen, which produces hydrogen from gas using CCUS to reduce emissions, comes with a series of its own additional challenges. Green hydrogen is expected to be cheaper than blue hydrogen in the vast majority of markets by the early 2030s. The focus on hydrogen, particularly in Europe, has been criticised by numerous authorities, from the IEA[38] to the EU Court of Auditors,[39] for overestimating hydrogen needs. Projects are being cancelled by many major producers; Equinor[40] and Shell/Aker have cancelled all blue hydrogen projects in Norway, putting an end to plans for a hydrogen pipeline.[41] Hydrogen compares poorly with renewable electricity in most sectors because it is expensive, energy-intensive, and extremely difficult to transport, especially over long distances. In addition, hydrogen itself is an indirect greenhouse gas that can amplify the effects of potent drivers of climate change like methane.[42] As with gas-CCS, upstream emissions massively reduce the potential emissions reductions claimed for blue hydrogen, even when assuming record-high CCUS capture rates. Carbon Tracker estimates that producing blue hydrogen from imported LNG would emit over twice the amount expected, and exceed the UK low-carbon hydrogen standard by 80-170 percent.[43]
16. Beyond reliance on a highly uncertain technology in the form of CCUS, the unrealistic promotion of gas-CCS and blue hydrogen risks contributing to a push for further gas extraction and LNG infrastructure building, jeopardising climate targets and leading to stranded assets.
17. Plans (however unclear they are in the government’s current policies) for producing bioenergy with CCS (BECCS) to meet the 2030 target for engineered Greenhouse Gas Removals also come with a set of unique and concerning challenges, not least very high land, energy, and water footprints, and potentially damaging effects on croplands and biodiversity.

Recommendations

18. End all subsidies and state funding for CCS. Instead, the government should prioritise spending public finance on the communities that need it most and on key enabling infrastructure for a just energy transition, that phases out fossil fuels in line with the Paris Agreement, and improves energy efficiency to reduce consumption. This plan should include the “credible alternative pathway without the use of CCUS” that the NAO notes the government currently lacks.[44]
19. Prohibit BECCS in the UK.
20. Promote alternatives to CCUS, including structural reforms like material substitution (use of more sustainable alternatives), and greater reuse and recycling, that reduce the need for new production of hard-to-abate products like cement or for hard-to-abate processes like waste incineration.
21. Rule out blue hydrogen production and consumption in the UK. Where demand is demonstrated as absolutely necessary, any hydrogen needs should be met with green hydrogen produced near to the point of use.

22. End the oil and gas lobby’s overwhelming influence on UK energy policy,[45] which is a major reason for the unrealistic push for CCUS.
23. Push for an end to all CCUS projects.

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