Scrapping of CCS project will boost cost of meeting emissions targets, Audit Office warns

The competition was scrapped in former Chancellor George Osborne’s autumn Spending Review last December, in a move that surprised many in industry and was not mentioned by Osborne in his speech to the House of Commons. Work on the two competing projects, White Rose in Yorkshire and Peterhead in Scotland, both ceased before their final designs were submitted.

The National Audit Office (NAO) prepared the report as part of a briefing for the Environmental Audit Commission, a cross-party group of MPs, on the sustainability aspects of the Spending Review. It said that cancelling the competition would delay CCS deployment in the UK by a decade, and that the Treasury and DECC failed to quantify the cost of this delay, but that DECC did warn the Treasury about the impact on costs of meeting the 2050, although this was ignored as the Treasury believed that the competition was not cost-effctive and aimed to deliver CCS before it was needed. The NAO also warned that the decision was likely to reduce the confidence of investors in government technology schemes in future. The cancellation of the competition mean that there is “no viable way to achieve deep emissions reductions from the industrial sector in the near future,” the report concludes.