Acorn: Scotland's carbon capture project in doubt as Labour minister to 'bid' Rachel Reeves for funds

A Scottish Labour minister has raised fears the long-delayed Acorn carbon capture project could be further held up after admitting he is having to “bid” with Chancellor Rachel Reeves to get the investment over the line.

UK energy minister Michael Shanks stressed his department is having to lobby Ms Reeves to sign off funding for the crucial project, insisting it would be a “significant sum of public money" for the Treasury to part with.

The planned Acorn carbon capture site.

The Chancellor is poised to determine whether to finally fund the Acorn project at her spending review next month. The decision comes amid reports her team is mulling potential cuts after MPs warned the “high risk” policy should be re-evaluated to ensure it is “affordable for taxpayers and consumers”.

READ MORE: Labour minister warns North Sea to 'plan for future' without oil and gas amid Government carbon capture rift

The key details of the Acorn project

The Acorn project, which would be based near Peterhead, has been in the pipeline for years and would allow fossil fuels to continue to be burnt without, in theory, releasing harmful carbon emissions.

The project is seen as key to scaling up the low-carbon hydrogen sector in Scotland and future plans for Grangemouth, but the technology has not yet been demonstrated at commercial scale.

Chancellor of the Exchequer Rachel Reeves and Energy Security and Net Zero Secretary Ed Miliband. PIC: Justin Tallis/PA Wire

Speaking in front of Holyrood’s economy and fair work committee on Wednesday, Mr Shanks insisted the UK government was “supportive of the Acorn project” and refuted claims Ms Reeves was “going cold” on funding.

He said: “The Secretary for State has been really clear in Parliament that we see it as a crucial part of how we deliver our decarbonisation journey for Scottish industry and energy. It’s a really important investment proposition.”

Energy Minister Michael Shanks with Cerulean Winds' alliance partners on a tour of the Port of Ardersier near Inverness hearing about the Aspen floating windfarm which will create over 1,000 jobs. | Contributed

The minister, however, admitted his department is having to lobby the Chancellor to approve funding for the project to get up and running.

He said: “It is obviously a significant sum of public money and it’s right that it’s for the spending review to make that decision. Our sense of it is that it is a serious part of our spending review bid and it will be considered alongside everything else in the next few weeks and announced to Parliament in the usual way.”

Minister pressed over Grangemouth

Mr Shanks was pressed by SNP MSP for Falkirk East Michelle Thomson over Petroineos’ closure of the Grangemouth oil refinery and who was responsible.

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Ms Thomson said: “I can tell you both categorically both my anger and my significant disappointment at what has happened. And all of us in politics need to play our part in taking accountability and responsibility for this situation - for the people that work there and the people in the town and for Scotland.

“I feel I’ve done everything I can, but I take responsibility and accountability for that because I’m an elected politician. Do you?”

Mr Shanks claimed the previous Conservative UK government had refused past attempts from the SNP Scottish Government for Project Willow, the blueprint for future industries to be developed at Grangemouth, to be drawn up years ago.

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He also told MSPs that Grangemouth had been allocated more time and staff from UK ministers and officials in finding solutions to the refinery closing and future plans “than any other issue that we have faced as a government in the last nine months”.

Minister on regrets

Mr Shanks pointed to UK energy secretary Ed Miliband “having more meetings on this than anything else” and himself “meeting almost every single week on this question”.

He said: “We could not turn around what has been a long-standing issue at that refinery in nine months.

READ MORE: Inside Project Willow: How trees, waste and wind will transform Grangemouth

“It’s not a political answer about passing responsibility. It’s a reality that years ago, we knew that the situation at Grangemouth was precarious and the previous government did nothing about that.

“I know the Scottish Government would have been interested in funding Project Willow at an earlier stage. The UK government did not support them on that. That is a deep regret, but I’m afraid it’s not a regret that I have complete control over.”