The government’s Carbon Capture and Storage scheme was cancelled due to disagreements between the DECC and HM Treasury, the National Audit Office has found.
The Carbon Capture and Storage competition was an attempt by the government to emissions limiting technology, but was cancelled late in 2015. By the time it was cancelled, £100 million of taxpayer’s money had already been spent. This is in addition to the £68 million spent on a pervious CCS competition that ran from 2007 to 2011 and was also shelved before it came to fruition.
The NAO condemned the lack of communication and agreement between the now defunct Department for Energy and Climate Change and HM Treasury, which it saw as ultimately responsible for the cancellation of the competitions.
The DECC had not, the watchdog found, managed to agree a final cost for the project and so could not give an accurate figure for the total funding needed to the Treasury. As such, the scheme was cancelled ahead of a government Spending Review in 2015 due to worries about further future costs that would fall at the feet of energy customers. At the time, the Treasury had pledged to put up £1 billion worth of capital funding for the project, but this was pulled as the scheme was cancelled.
Meg Hillier, the head of the public accounts committee, criticised the series of events that led to the cancellation of the scheme on various grounds.
She said: “This hugely ambitious and expensive government programme has faced a number of problems, but was on the verge of an important milestone when it was slashed.
“The then DECC failed to convince HM Treasury but ultimately the taxpayer lost out both financially and in the ending of this programme to reduce carbon emissions.
“Taxpayers will be alarmed that disagreement between departments means the taxpayers have little to show for the £100m the government spent on the competition.”
The DECC’s successor, the Department for Business, Energy and Industrial Strategy, issued a statement explaining that the cancellation of the CCS competition did not mean that the technology was no longer being pursued.
A spokesperson for the department said: “We haven’t closed the door to CCS technology in the UK, but decisions had to be taken to control government spending and protect consumer bills.
“This is why the government ended the funding for the CCS competition, and ensured taxpayers were protected from significant costs when the competition closed.”
