Rachel Reeves will invest billions of pounds in public sector investment in her Budget after the Government announced plans to spend almost £22bn over 25 years funding carbon capture and storage projects. We are paving the way to increase this.
In what is expected to be one of Parliament’s biggest green spending commitments, the Chancellor, Chancellor and Energy Secretary Ed Miliband will reveal details of a visit to Liverpool metropolitan area on Friday, proclaiming the arrival of a “new era”. It is planned. For clean energy related work.
Mr. Reeves said the announcement would come as a “drumpet” of measures to accelerate economic growth, with less than a month until the Oct. 30 budget.
The government hopes the investment will reignite Britain’s flagging heavy industry by funding two major carbon capture and storage (CCS) clusters. one in Teesside in north-east England and the other in north-west England and north Wales.
The technology is controversial as it has never been used on a commercial scale in the UK, but environmentalists say big energy companies could use it to extend the life of fossil fuel assets. He warns.
Greenpeace said the government was at risk of being “trapped in second-rate solutions”.
But ministers and officials expect it to play a key role in the government’s climate ambitions as a key way to achieve net zero.
The Prime Minister will say this commitment has helped bring in an estimated £8bn of private investment from some of the world’s biggest energy companies, including BP and Norwegian energy company Equinor.
Mr Reeves’ comments came after he suggested changes to the government’s fiscal rules to allow billions of pounds of extra capital investment in a speech to the Labor Party conference in Liverpool last week.
“The details of the fiscal rules will be set out in the draft budget, but we must make sure we have room for capital investment,” he told reporters ahead of Friday’s announcement.
Friday’s announcement came amid concerns of fresh energy price shocks caused by escalating Middle East conflicts.
Mr Reeves warned that the UK would not be affected by the sharp rise in oil prices, which rose 5% on Thursday, although he warned that financial markets had so far reacted poorly.
“There are risks to both inflation and GDP. That’s something we’ll be watching closely.”
Carbon capture technology works by capturing emissions from power plants and factories before they are released into the atmosphere and contribute to the climate crisis. Emissions are transported through gas pipes and stored on the seabed.
Keir Starmer said: “Today’s announcement provides much needed funding for our industry for 25 years to create jobs, accelerate growth and repair this country for good. It will give you confidence.”
Officials expect the project to attract around £8 billion of private investment, directly create 4,000 jobs and support 50,000 jobs over the long term.
The East Coast cluster is backed by oil companies such as BP and Equinor. The HyNet North West project is being developed by Italian oil company Eni.
Using CCS to produce “blue hydrogen” or to operate gas power plants is a topic of debate among green groups and some climate researchers. This is because a steady supply of fossil gas is required, and extraction and transportation generate emissions that cannot be captured.
Instead, activists say governments should invest more in clean power sources and “green hydrogen,” which is made from water and renewable electricity using devices called electrolysers.
Doug Parr, policy director at Greenpeace UK, said: “For a government keen to tackle the climate crisis, £22bn is too much to spend on something that will extend the production life of global warming oil and gas. This is the amount of funds.” .
“Carbon capture may be necessary in hard-to-abate sectors such as cement production, but hydrogen from gas is not low carbon and risks being locked into a second-class solution.”
Lorenzo Sani, an analyst at climate think tank Carbon Tracker, told the Guardian that the government’s decision was a “repeat of the previous government’s mistake” of injecting new funding without first reassessing its CCS strategy. That’s what he said.
Sani said the plan “remains reliant on outdated and overly optimistic (cost) assumptions” that would “dedicate even more taxpayer dollars to risky and unpromising carbon capture projects.” “There is a danger of wasting money,” he said.
Dr Andrew Boswell, an independent researcher on the CCS industry, dismissed the investment as a “huge profit giveaway to the fossil fuel industry” and the “wrong decision” for the bill, energy security and the planet. .
The UK’s first attempts to establish a carbon capture industry began in 2009 under the Labor government. However, after the Conservative Party won in 2010, the £1 billion funding plan stalled and was scrapped in 2015. The Conservative Party continued to shortlist two CCS projects for funding in 2021, but did not commit to investment until they were voted out of government in July.
Mr Miliband said: “We were proud to launch the industry in 2009, and we’re even more proud to make it a reality today.
“On Monday, 150 years of coal industry in this country came to an end. Today, a new era begins. By securing this investment, we are ensuring a clean energy revolution that will rebuild Britain’s industrial heartland. It will pave the way.”
