I will resume where I finished, if I remember rightly. I was saying that nature has continuously captured carbon dioxide in the atmosphere and stored it temporarily in the biosphere and permanently in the geosphere. The process has continued for billions of years, and the amount of atmospheric carbon dioxide fell steadily to 200 parts per million about 20,000 years ago, which was a staggering 95% drop. However, atmospheric carbon dioxide started rising again. By the start of the industrial revolution, it had crept up to 280 parts per million, but in the last century we have reversed natural carbon capture and storage at an astonishing rate as we have dug up the fossil fuels and cut down the trees and stuck the carbon within them back into the atmosphere. Atmospheric carbon dioxide is now at about 420 parts per million—a jump of about 50% in a geological blink of the eye.
The last 10,000 years—the Holocene period in which we live—has been remarkably benign from a climate point of view. Steady, moderate temperatures have allowed human civilisation to flourish, but we are now undoing that. The whole point of the net zero mission is to stop carbon dioxide levels rising further so that we can keep our benign environment.
We can and should promote natural carbon capture and storage. We should plant more trees, restore peatlands and increase the carbon-rich organic content in soil. However, there is only so much land that we can plant with trees, so that can only ever be a small part of the solution. What we are talking about today is therefore industrial carbon capture and storage.
Many people in the environment movement are worried about industrial carbon capture and storage, and some are outright opposed. As chair of the all-party parliamentary group on the environment, I think that those fears need to be taken seriously. We can all agree that we should do CCS only if it is robust and locks away carbon away permanently. Otherwise, there is literally no point. The overriding fear is that CCS will create a moral hazard that means we will give up on other ways to get to net zero, but the UK and other Governments are totally committed to getting to net zero by the middle of the century and there is no scenario in which CCS can get us to net zero on its own. Whatever we do with CCS, we must increase renewable energy production, move to electric vehicles and phase out coal power and gas boilers. That is already happening, as we have seen with the announcements this week.
What CCS can do is enable us to transition to net zero more quickly and at far lower economic cost. Do not just take my word for it: the UN’s Intergovernmental Panel on Climate Change and the UK’s Climate Change Committee both see carbon capture and storage as essential for reaching net zero. The CCC’s sixth climate budget declared that CCS was a necessity, not an option, and that the UK needs to capture between 75 million and 180 million tonnes of carbon dioxide a year by 2050, starting off with 22 million tonnes by early 2030, which is just nine years away.
CCS is currently the only technology we know of that can significantly decarbonise industries such as steel, cement, glass and chemicals. Unless we go back to the middle ages, we will still need those industries, and only CCS can ensure that we get to net zero without forcing those industries overseas, which would just export our pollution and lose us jobs. CCS can help produce low-carbon hydrogen that can power carbon-neutral boats, trucks and trains, and other industrial processes. CCS can also cut the cost of getting to net zero, which is an issue of rising political concern. The International Energy Agency has estimated that the cost of tackling climate change will be 70% higher without CCS.
There are various offshoots of CCS. The normal CCS will not reduce the amount of carbon dioxide in the atmosphere; it will just dramatically slow down the increase. But there are technologies that will reduce the level of carbon dioxide in the atmosphere: greenhouse gas removal. Biomass energy with carbon capture and storage—BECCS—is one being piloted by Drax, and direct air capture is another. Greenhouse gas removal could help mop up residual emissions that are otherwise impossible to eliminate, but BECCS has become controversial in the environment movement partly because of concerns about how sustainable it is to grow the biomass. That must be addressed. There is also concern about the carbon accounting from BECCS: when we import biomass from other countries, we are taking credit for carbon captured in another country. That is a valid criticism, but it is an argument about adjusting our carbon figures rather than giving up on BECCS.
Last year, I hosted virtually the global launch of the Coalition for Negative Emissions, bringing together stakeholders from around the world who are interested in removing greenhouse gases. The potential impact is enormous, particularly if economies of scale mean that the costs of removing a tonne of carbon dioxide come down. I therefore welcome the Government’s announcement yesterday, in the net zero strategy, that they will target greenhouse gas removal of 10 million tonnes a year by 2030, and that they will amend the Climate Change Act 2008 to include engineered CO2 removals. That might be controversial among some environmental groups, but it is simply irrational and unscientific to include CO2 molecules removed from the atmosphere by a tree but not those removed by humans.
I have participated in many debates on CCS, and normally at this stage someone says that we should not support it because it is an unproven technology, but that is not true. The science is actually quite straightforward: it is stripping carbon dioxide out of the emissions from power plants and factories, liquifying it, transporting it by pipeline or boat, and then storing it. Most aspects of this are already done. For example, there are already 8,000 km of pipeline carrying CO2 around the US for industrial use.
The storage point is more complex. It needs to be stored permanently, and the preferred place to do that is in geological formations, up to 3 km below the surface of the earth. One such perfect place to do that is under the North sea, where natural gas and oil have been stored by nature safely for millions of years without leaking out. Again, this is not untried technology. The first commercial CCS site in the world was opened in 1996, some 25 years ago, at the Sleipner gas field between Norway and Scotland. Since then, it has been taking 1 million tonnes of CO2 out of emissions every year and sticking it a kilometre underground. That single CCS plant has reduced Norway’s greenhouse gas emissions by 3%, compared to what they would otherwise have been. That site is monitored closely and there has been no leakage. The Global CCS Institute, a US think-tank, now reports there are 26 operating CCS facilities worldwide in the US, China, Australia, the middle east, Canada and Europe.
However, it is true that CCS is untried and untested technology in the UK. We do not have CCS yet— we have fallen behind. That is why I welcome the announcement yesterday that the Government are pushing ahead with two new CCS clusters at HyNet North West and the east coast cluster. I look forward to hearing more from the Minister and colleagues about that.
There are lots of very powerful reasons why the UK should lead on CCS. The UK has a particular national advantage when it comes to CCS, and CCS could bring particular benefits to the UK. Our oil and gas industry means we already have the skills and infrastructure to develop CCS. As gas and oil extraction declines, CCS can take over. It is estimated that rolling out CCS will save 50,000 jobs in industries such as steel, cement, chemicals, ceramics and glass, and CCS can become a sector in its own right, creating 10,000 more jobs. The ideal locations for these jobs would be in the former industrial heartlands of north-east Scotland, Teesside, Humberside, south Wales and Merseyside. There could be no better example of levelling up.
We have the natural geological features. We have as much carbon storage capacity underground as the rest of the EU combined. Many European countries will not be able to do their own CCS, as they have neither the geology nor the industry, and this creates a huge export opportunity for the UK, capturing carbon dioxide and burying it underground on behalf of other countries. The UK is not doing any CCS yet, but we are almost uniquely positioned to be a CCS superpower.
The creation of a CCS industry is not going to happen by itself. We have companies that can develop CCS, but they have no financial incentive to do it. They are not going to invest billions of pounds only to find out there is no possibility of generating revenue. What they need is a predictable, long-term regime that makes CCS commercially viable, and that is the lesson from Sleipner in Norway. That was not built as a loss-making experiment; it was the result of a commercial decision by the Norwegian state oil company, now Equinor, to avoid paying carbon taxes by burying the carbon instead.
In the UK, we know how to set up regimes to nurture the creation of a new industry. We did it with offshore wind power. By setting up the contracts for difference regime, the Government facilitated the creation of a world-leading power industry that has worked better than almost anyone dared to dream. Costs have fallen so much that it has become competitive and wind now produces more electricity than any other source.
The good news is that this Government are committed to CCS, more than any previous Government, and I strongly commend them for it. They underlined their commitments in last year’s 10-point plan for climate change, promising to invest £1 billion a year in the technology. They reinforced that commitment yesterday with the announcement that they are moving ahead with support for the first two CCS clusters. They also raised their ambition, which was a surprise to me, saying they wanted to capture 20 million or 30 million tonnes of CO2, up from just 10 million tonnes, which was the previous announcement, bringing the amount in line with what the Committee on Climate Change says is needed.
This is all welcome news, but it would not be much of a debate if I just said that the Government are doing everything perfectly. Indeed, I have some asks, although the announcements yesterday address some of them. My first ask is simply this: please keep calm and carry on. In 2007 and 2012, the Government launched competitions for CCS, but in both cases they subsequently cancelled them. That was so damaging to confidence in the industry. Such a stop-start approach risks repeating the mistakes of nuclear. Where once we were a world leader in nuclear power, successive Government wavering over decades meant that we ended up dependent on other countries. On CCS, will the Government please have the courage of their convictions?
My second ask is that the Government support CCS in next week’s spending review. Given yesterday’s announcement, I presume that that is a foregone conclusion. The Carbon Capture and Storage Association states that its members can reach the 10-milion tonne removal target for a maximum cost of £1.2 billion a year—that target has now gone up to 20 million tonnes, so the big question is whether it can still be done for £1.2 billion. That is about one quarter of the peak annual subsidy that launched the wind power industry, so as economies of scale kick in for renewables and as subsidies decline, they can be redirected to CCS.
My third ask is that the Government produce a long-term financial structure for the industry, so that companies can invest with certainty. That is the biggest ask of the industry. The levy control framework was a huge success for offshore wind, largely because it gave companies a 10-year funding horizon, within which they knew the revenues that they could make. That gave companies the confidence to invest at scale.
Yesterday, the Government announced the industrial decarbonisation and hydrogen revenue support or IDHRS scheme. That is very welcome, but I understand that it is only for the current spending review period and that the first two CCS clusters announced yesterday will not be operational within that time. Therefore, I would welcome confirmation of how the Government will ensure that CCS clusters have sustainable revenue once they are operational. If the CCS funding is subject to three-year spending review horizons, rather than a 10-year horizon, businesses will be reluctant to invest in the sector as much as they otherwise would. The Government should give CCS the same long-term certainty that they previously gave wind power.
My fourth ask is that the Government should set out a long-term vision for the development of CCS—we had a taste of that yesterday—for it to become a fully competitive, financially sustainable sector. That is a vision that would go above and beyond the clusters it would initially fund. To reap the full benefits of CCS, practice needs to be embedded across industry and the country. The Government need to establish a fully functioning market for carbon in the UK now that we have left the European emissions trading scheme.
My fifth ask is about the need for independent monitoring of the CCS clusters that go ahead. Environmental groups will rightly be looking like hawks for signs of any leakage of CO2 out of the ground, or for game-playing by the industry. CCS companies cannot be allowed to mark their own homework. We also need clarity on the Track-2 process as soon as possible, to keep up momentum in the industry. I also urge the Government to look at the 1 GW hydrogen target as a minimum, because industry feels that it could do far more than that, which would be welcome.
Finally, I have a request to make of environmental groups. We all agree that tackling climate change is the most important challenge we face. Yes, they must hold Government and industry to account, but for all our sakes they should please not start campaigning against CCS itself. Let the debate be driven by science, not other motives. Rather, they should work with the Government and industry to ensure that CCS plays the vital role in getting to net zero that the IPCC and CCC expect of it.
The Government are committed to supporting CCS. They must now ensure that the UK is no longer left behind, but can reap all the environmental and economic benefits of becoming a CCS superpower. We did it with wind power and we can do it with CCS. We can deliver another great green success.