Scotland has been dealt an “economic and environmental” blow after a flagship carbon capture project was sidelined by the UK government, a billionaire businessman has said.
Sir Ian Wood, the tycoon and philanthropist, was among the figures expressing disbelief at the decision.
Greg Hands, the energy minister, declared that two English projects, in the northwest around Liverpool and across Humber and Teesside, are to be granted Track 1 status, with access to state support such as the £1 billion carbon capture, utilisation and storage (CCUS) infrastructure fund set up in 2018.
The potential for a faster development timetable may see the projects operating by the middle of this decade which would bring substantial investment and thousands of jobs to the areas.
The Scottish cluster, based around the St Fergus gas terminal in the northeast but also incorporating the Grangemouth complex, was announced as a reserve project for Track 1. The cluster, known as the Acorn project, would move up if either of the other two were to fail or be discontinued.
Sir Ian, who is involved in developing an Energy Transition Zone in Aberdeen, said: “This makes little economic or environmental sense and is a real blow to Scotland.
“There is also a huge opportunity for oil and gas firms, domestic supply chain companies and our wider economy to harness the skills and expertise of our current workforce to create many good, green jobs in the coming years and contribute significantly to the net-zero ambition. We have previously made clear that there is a strong case for five or six clusters to be backed now to encourage collaboration across the UK and to accelerate these efforts.
“At the very least I urge the UK government to reconsider their decision and add a third cluster to the Track 1 programme which should undoubtedly be the excellent Scottish bid.”
Carbon capture is seen as a key way to tackle emissions from heavy industry as well as reusing North Sea infrastructure and empty fields. It is expected to work by taking CO2 emissions and then either reusing them or storing them permanently underground.
Michael Matheson, Scotland’s energy secretary, said: “It is clear that the Acorn project is the most cost-effective and deliverable opportunity to deploy a full chain CCS project in the UK. It is therefore completely illogical that the UK government has taken the decision not to award the Scottish cluster clear and definitive Track 1 status.”
Oil and Gas UK, the industry body, also suggested that more than two carbon capture sites would be needed if the country were to become carbon neutral by 2050.
Hands said: “A reserve cluster is one which met the eligibility criteria and performed to a good standard against the evaluation criteria. As such, we will continue to engage with the Scottish cluster throughout phase 2 of the sequencing process, to ensure it can continue its development and planning.”
Disbelief as Scotland loses out in £1bn carbon capture project