Fury as Scotland misses out on UK Government backing for first carbon capture and storage facility

There is widespread anger after it emerged Scotland had missed out on UK Government funding for a new carbon capture facility, in a decision industry leaders said made “little economic or environmental sense”.

The Acorn Project at St Fergus in Aberdeenshire had hoped to be ready by the middle of the decade but is now likely to come in the second phase of the UK’s carbon capture, utilisation and storage (CCUS) cluster sequencing process. It was announced yesterday the first development is set to be built on the Humber and around Liverpool instead.

The move sparked a furious row as the SNP claimed the decision betrayed the north east of Scotland and failed to meet the UK Government’s responsibilities for a just transition. Sir Ian Wood, chairman of the Energy Transition Group, meanwhile, described it as “a real blow to Scotland”.The long-planned project was designed to take and store carbon dioxide from the Goldeneye field in the North Sea and the refinery in Grangemouth via existing pipelines to be stored in the north east. It was described as “shovel-ready”.

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SNP Business and Energy spokesperson Stephen Flynn MP said: "The Tories pulled the plug on £1billion of carbon capture investment for Peterhead in 2015 and now they've repeated the trick again.

St Fergus Gas Terminal is at the centre of the Acorn carbon capture and storage project. (Photo: Shell)

"It beggars belief that at the very moment Tory ministers are being challenged to match the Scottish Government's £500million investment in a just transition - they are instead sticking two fingers up to Scotland and withdrawing investment.

"The north east of Scotland is the home of the offshore industry and the obvious location for a carbon capture project. How can we have a ‘just transition’ if the Tories aren’t willing to put the north east of Scotland first? It’s clear the Tories have put holding seats in the red wall of northern England ahead of saving jobs in Aberdeen and the north east.”

ETZ Ltd Chairman, Sir Ian Wood, said it was “hugely disappointing” and urged the UK Government to reconsider."This makes little economic or environmental sense and is a real blow to Scotland.

“Scotland is the most cost-effective place to begin CCUS in the UK given the capacity for CO2 storage in the North Sea and the existing oil and gas infrastructure available to repurpose for CO2 transport and storage. Vitally, there is also a huge opportunity for oil and gas firms, domestic supply chain companies and our wider economy to harness the skills and expertise of our current workforce to create many good, green jobs in the coming years and contribute significantly to the net zero ambition.

“The Committee on Climate Change (CCC) has stated that “CCS is a necessity not an option” to achieve net zero targets and if we are serious about decarbonisation then we must move much more quickly and comprehensively than we have done to date."

The Scottish cluster will now be considered as a “reserve” with the energy minister, Greg Hands, saying that if “gthe Government chooses to discontinue engagement with a cluster in Track-1, we can engage with this reserve cluster instead”.

In a statement, Mr Hands said: “We are also announcing the Scottish Cluster as a reserve cluster if a back-up is needed.

“A reserve cluster is one which met the eligibility criteria and performed to a good standard against the evaluation criteria.

“As such, we will continue to engage with the Scottish Cluster throughout Phase-2 of the sequencing process, to ensure it can continue its development and planning.”

Banffshire and Buchan Coast SNP MSP Karen Adam said she was “utterly appalled” at the decision.

She continued: “The down turn in oil and gas, Covid and Brexit have devastated our North East communities.

“This would have been an incredible step forward for our work force, our environment and local economy.

“Make no mistake this is a political choice. Once again we have been overlooked and I’d go as far to say snubbed."

And Scottish Energy Secretary Michael Matheson added: “This is a terrible decision by the UK Government.

“All credible evidence and analysis has demonstrated that CCUS is critical for meeting Scotland’s statutory emissions reduction targets.”

He added: “It will also significantly compromise our ability to take crucial action to reduce emissions in Scotland and will have serious implications for delivering a just transition for those in our oil and gas sector.”

The UK government said it remained committed to the Acorn project's potential.

Scottish Tory net-zero spokesman, Liam Kerr, described the move as “disappointing”, but added: “Support to develop CCUS technology is vital for the future of the North Sea energy industry.

“The Scottish Conservatives have been pushing hard for the north east to be at the forefront of CCUS.

“That will not change and it still will be a UK and world leader.

“Looking to track two within this decade, we will redouble our efforts with the UK Government, which has been the only one to acknowledge the strengths of Scottish CCUS, especially since the Greens and SNP formed their coalition of chaos.”