U.K. Opposition Lawmaker Accuses Government of Cutting CCS Funds

The U.K. government was accused of “stringing along” carbon capture and storage developers after a lawmaker in the opposition Labour Party said a 1 billion-pound ($1.6 billion) fund for the technology was cut by 80 percent.

Tom Greatrex, Labour’s Shadow Energy Minister, said cabinet office documents showed the sum agreed to by government for CCS projects has been reduced to 200 million pounds in the current spending review period through 2015.

“Despite claiming that 1 billion pounds in support is available, this secret government document confirms that in fact available funding has been slashed by an astonishing 80 percent to just 200 million pounds,” Greatrex said in an e-mailed statement today. “The government has been caught out stringing the CCS industry along.”

The U.K., seeking to curb pollution, had pledged to support CCS with a 1 billion-pound funding contest because it traps emissions from power stations and industry for burial underground. British CCS projects earlier failed to win any funds in the first phase of a separate European Union-run contest.

“This decision will likely slow down projects in the U.K.,” said Kieron Stopforth, an analyst at Bloomberg New Energy Finance. “The document indicates that only 200 million pounds will be available until 2015, which may see projects start construction later than developers had hoped for.”

A spokesman at the Department of Energy and Climate Change said today there was a government commitment to the CCS contest. Funds will be available when projects need it, probably split across spending review periods depending on which ventures win, he said by e-mail. Prime Minister David Cameron said Dec. 11 the U.K. was putting “serious money” into CCS.

Spending Review

The Project Assessment Review document, e-mailed from Greatrex’s office, said the 1 billion pounds agreed to with Treasury was retained “although only 200 million pounds is, at present, available for the current spending review period.” The document details a project review period of Feb. 27 to March 2, 2012.

The government in October selected four out of eight bids, including SSE Plc, Alstom SA and Progressive Energy, for its 1 billion-pound contest. The next announcement on the contest is planned for spring, the DECC spokesman said today.

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