A report from Carbon Tracker, an independent think tank, found that the UK’s carbon capture, utilisation, and storage (CCUS) strategy is “based on optimistic techno-economic assumptions that are now outdated and unrealistic.”

The report warns against over-reliance on unproven technology, and highlights the risk of committing taxpayer money to ambitious projects.

The UK’s current CCUS strategy, unveiled in December 2023 with a hefty £20 billion backing, aims to capture 20-30 million tonnes of CO2 annually by 2030.However, the report warns that this strategy, based on optimistic assumptions, could lead consumers into a costly, fossil-based future, ignoring cleaner and more cost-effective alternatives readily available.

“CCUS technology has proven to be much more complex and expensive than thought, while renewables cost reductions have dramatically changed the landscape,” said Carbon Tracker associate analyst and report author Lorenzo Sani.

“While the government is playing an important role in de-risking new projects it urgently needs to revisit its targets and focus its resources on high-value applications such as cement and hydrogen.”

Since the recommendations put forth by the Climate Change Committee in December 2020, cost estimates for deploying CCUS have more than doubled, while advancements in renewables and battery storage have significantly altered the energy landscape. This shift has prompted the think tank to urge a reevaluation of the government’s targets and resource allocation.

Recommended reading

• £1M boost to Edinburgh Uni Scientists for Carbon Capture Tech
• Heriot-Watt and Strathclyde Unis Part of UK Decarbonisation £1.2M Funding
• Logan Energy Investment Round Raises £5 Million

In particular, the think tank is concerned with plans to deploy CCUS in sectors such as steel production and gas-fired power plants, deemed potentially outmoded in the face of emerging cleaner technologies. Notably, Tata Steel and British Steel have veered away from installing CCUS at their UK facilities, favouring Electric Arc Furnaces instead.

The report also scrutinises the UK’s biomass-based power generation strategy, highlighting the precarious position of the Drax power station conversion. Currently, the largest carbon capture project in the UK pipeline, the Drax conversion faces technical challenges, potential asset stranding, and exorbitant costs. 

Carbon Tracker warns that taxpayers could be locked into a lengthy and expensive contract, resulting in electricity prices up to three times higher than offshore wind power.

Moreover, the research underscores the urgent need to stabilise the UK’s carbon market to ensure profitability in the CCUS sector. Most applications require a stable carbon price of at least £100 per ton to compete effectively, yet the UK Emissions Trading Scheme has experienced volatility and record lows, hindering the viability of CCUS projects.

“Fixing the UK’s carbon market – either by establishing a rising price floor or, preferably, linking it back to the EU scheme – is the single most important action needed to deliver the government’s vision of a self-sustaining and competitive CCUS sector,” continued Sani.