Development and deployment of carbon capture, utilisation and storage: statement by the Net Zero Secretary - 26 October 2021

Presiding Officer, I want to provide an update to members in light of last week’s illogical and disappointing decision by the UK Government to not support one of the most significant parts of Scotland’s journey to net zero - the Scottish Cluster led by the Acorn CCS Project. This is despite a successful bid that the UK Government acknowledge met their assessment criteria, instead designating it as a “reserve” cluster.

Members will rightly be interested to understand more about what this decision means for Scotland and our response to this UK Government failure.  In doing so, it is important to set CCUS in its proper context as a crucial element of Scotland’s decarbonisation as we move towards a just transition to net zero.

We are rightly proud of our world-leading statutory emissions targets, and CCUS it is anticipated will play a vital role in helping us to reach these. We have consistently called on the UK Government to deliver on their areas of climate change responsibility; collaborative action is particularly vital as we approach COP26.

While it is encouraging to see proposals in a number of areas, the recent UK Net Zero Strategy does not go far enough. There are a number of areas where we need the UK Government to take more action and act faster. This includes more support for renewables and of course CCUS.

The UK Government decision announced last week on the Scottish Cluster is out of step with the Net Zero Strategy raised ambition for the amount carbon captured and stored in the UK.  This more than doubles the ambition for carbon capture set out in the Prime Ministers Ten Point Plan, and yet, there is no corresponding increase in support for the required multiple CCS projects with the capacity to achieve this.

Scotland has vast potential for CO2 storage in the North Sea, in depleted oil and gas reservoirs.  As seen with the Acorn project, repurposing onshore and offshore legacy oil and gas infrastructure offers us rare and cost-effective access to these storage sites.

The Acorn project is expected to store over 6 million tonnes of carbon dioxide a year by 2030 – approximately 10% of Scotland’s current emissions - and up to 20 million tonnes by 2040. On this basis alone, the decision by the UK Government not to award the Scottish Cluster “Track 1” status is wholly illogical. It shows a clear lack of ambition and leadership on climate change by the UK Government. In stark contrast, we see the establishment of CCS in Scotland being able to support decarbonisation efforts across the UK and also in other nations. 

The Scottish Government has long been supportive of CCUS as a means to decarbonise our industry and underpins negative emissions technologies and as a vital tool in our armoury to achieving Scotland’s emissions targets. Our 2045 net zero target is based on advice from the Climate Change Committee who describe CCUS as a “necessity, not an option” and, significantly, who pointed to Scotland’s CO2 storage potential in recommending this date.

CCS offers an important transition opportunity for Scotland’s mature oil and gas industry. This UK Government decision will materially affect the businesses and communities in the North East of Scotland that possess existing skills and expertise required to transition to a low carbon economy, delaying the opportunity to create many good, green jobs.

A just transition must be delivered across all of our communities, including those that have had a dependency on oil and gas. That’s why we’ve announced a £500 million Just Transition Fund for the North East and Moray – and have asked the UK Government to match that ambition - and why we’re also going to support those in carbon intensive industries with a skills guarantee.

I am aware some Members in this Chamber may have concerns over CCUS. Let me reassure those Members that I am aware of those concerns, and this government’s support for this technology is contingent on its performance and consistency with our climate targets. 

As the First Minister set out in her pre-COP keynote speech yesterday, CCUS with the highest possible capture rates could be a crucial technology for industrial decarbonisation and our energy transition, creating options and providing industry with the flexibility to transition their products and services to net-zero. It would mean we can drastically reduce emissions whilst providing security in our energy supply, and to provide industry with early options to decarbonise. It would ensure a future for Scotland’s industrial clusters in Grangemouth and the North East ensuring that important domestic industries continue significant employment within a net zero Scotland.

Presiding Officer, I wish to reiterate the Scottish Government’s support for the Scottish Cluster.

We have long supported the Acorn project, providing funding and policy support through feasibility stages since 2017, and continue to believe that Acorn is the most cost-effective and deliverable CCS project in the UK. The Scottish Cluster estimates its projects can support an average of 15,100 jobs between 2022-2050, with a peak of 20,600 jobs in 2031.

The UK Government's confirmation that two English industrial clusters would be awarded Track-1 status, overlooking the compelling case submitted by the Scottish Cluster is not just short sighted, but a serious mistake.

We engaged with the UK Government throughout this process to highlight the Scottish Cluster’s role as a vital component of decarbonisation both in Scotland, and throughout the UK.  We also offered the UK Government help in supporting the project on several occasions.

Despite the Scottish Cluster being considered by most as the most advanced CCS project in the UK, it was not awarded clear and definitive Track-1 status. It is instead a “reserve” cluster, for what we can only assume to be political rather than policy reasons.

It is astonishing that the UK Government has taken this decision, which significantly compromises our ability to take crucial near-term action to reduce emissions – not just in Scotland, but across the UK. 

The Chancellor is expected to deliver his budget on Wednesday; he has a chance to fix this in the budget announcement and I would urge him to do so.

Last week, Sir Ian Wood stated that the UK Government’s decision makes little economic or environmental sense, and likened their approach to leaving the best player on the subs’ bench. These are sentiments which I share, as, I’m sure, do many colleagues across the Chamber.

Presiding Officer, let me be very clear – this Government believes plainly and simply that the UK Government has made a serious mistake which it needs to correct and award the Scottish Cluster Track-1 status. The Scottish Cluster presents the best opportunity to reduce reductions by the mid-2020s. Not to recognise that smacks of politics not science.

This inexplicable decision shows the Tories are guilty of empty words and broken promises on ensuring a just transition for Scotland's communities. Remember the UK Government pulled the plug on £1billion of carbon capture investment for Peterhead in 2015 and now they've repeated the trick again. The North East of Scotland is the home of the offshore industry and the obvious location for a carbon capture project.

Therefore I am today calling upon the UK Government to reverse this decision, and accelerate the Scottish Cluster to full Track-1 status without delay. 

We have previously advised the UK Government that we would help to support the Scottish Cluster, and stand ready to do so.  But we do not hold all the necessary legislative and regulatory levers which are retained by the UK Government.

Earlier today, the Minister for Just Transition, Employment, and Fair Work and I met with the Cluster representatives, affirming to them our continued support for CCS in Scotland, and outlining our call to the UK Government. I can also confirm that the First Minister will be writing to the Prime Minister to make the strong case for the acceleration of the Cluster to Track-1 in the coming days.

Presiding Officer, CCUS will play an essential role in industrial decarbonisation in Scotland, and worldwide. The planned Scottish Cluster will play a vital role in a just transition, and to ensuring that Scotland reaches its net zero goals by 2045. The Scottish Government will continue to press for Track-1 status for the  Scottish Cluster, and to support the development and deployment of CCUS in Scotland that is compatible with our climate change targets.