UK carbon capture spending faces budget pressure as campaigners urge cuts

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UK carbon capture spending cuts

Highlights

Chris Packham urges the Treasury to cut £24 billion in planned CCS spending, arguing it surpasses investments by the U.S., EU, Norway, and Japan combined.
The government is reportedly reducing grants for electric heat pumps, which campaigners warn could weaken efforts to cut emissions from buildings emitting one-fifth of UK greenhouse gases.
CCSA reports over £4 billion in supply chain contracts awarded and 5,500 construction jobs supported by the first UK CCS projects, despite fiscal pressures threatening project pace.

Budget pressure on carbon capture plans

As reported by The Guardian, environmentalist Chris Packham is leading a late appeal for the Treasury to scale back support for carbon capture and storage projects, calling the technology a "tech fairytale" and the planned spending a "national embarrassment". He says the government should protect funding that helps households lower bills instead of backing projects with uncertain climate results.

Packham argues that the £24 billion earmarked for CCS exceeds planned spending by the U.S., the EU, Norway and Japan combined. He says the money is being directed toward projects backed by major oil groups including BP and Equinor, and warns that failing to rein in the programme would signal that ministers are prioritising big oil over people and the planet.

The intervention also comes as the government reportedly plans to reduce grants for households replacing gas boilers with electric heat pumps. Campaigners say that shift risks weakening one of the more direct routes to cutting emissions from buildings, which account for about a fifth of the UK’s greenhouse gas output.

Aled Dilwyn Fisher, senior researcher at Oil Change International, says cutting proven climate measures while maintaining support for carbon capture would worsen the impact of broader spending reductions. Rosie Hampton of Friends of the Earth Scotland has also criticised what she describes as reliance on "fantasy plans" for turning the North Sea into a carbon storage hub rather than investing in warm homes, better public transport and green jobs.

Industry defends projects and jobs outlook

Supporters of carbon capture say the technology can trap emissions from fossil fuel infrastructure and store carbon dioxide underground, offering a route to lower emissions in industries that cannot easily switch to cleaner energy sources. But critics note that many expensive projects have struggled to advance and that real-world carbon savings have often fallen short of expectations.

Work on the UK’s first CCS projects has already begun at the East Coast Cluster near Teesside and Humberside and at the HyNet Cluster near Merseyside and north Wales. The second phase of the government’s support plan also includes £200 million for the Acorn Project in Aberdeenshire, alongside £80 million from the Scottish government.

Earlier this month, Martin McCluskey, parliamentary undersecretary at the Department for Energy Security and Net Zero, told an industry event that the government remains committed to carbon capture, although fiscal pressures may affect the pace of development. In response, the Carbon Capture and Storage Association says the first UK projects have already awarded more than £4 billion in supply chain contracts, potentially supporting about 350 UK companies and 5,500 construction jobs.

Mark Sommerfeld, the CCSA’s UK director, says pulling back now would undermine investor confidence, leave infrastructure underused and deepen industrial decline. The government has been contacted for comment.

Britain’s deficit-reduction stance ahead of the October 28 Budget was the focus of our earlier coverage, as Chancellor John Healey signalled he would stick to a tighter fiscal path while still trying to support growth. We also highlighted the latest GDP data showing modest resilience and the mounting political pressure over how far the Budget should go in easing living-cost strains without undermining fiscal discipline.

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