Free unlock edited abstracts

FT's editor Roula Khalaf chose her favorite stories in this weekly newsletter.

After MPs warned that a “high risk” policy should be reassessed to ensure it is “affordable for taxpayers and consumers”, Britain’s gambling on carbon capture and storage technologies is facing threats to cut the Treasury.

According to the people briefing the process, the Treasury will review carbon capture projects extensively in this year's spending review and acknowledge that they will not achieve the ambitious goals of new technologies.

The government announced 25-year carbon capture funding of £21.7 billion in October, but the money went to only two regions (in Teesside and Merseyside), leaving Hunber and Scotland projects in line.

These other plans are now likely to fall into a brief sneer of the spending review in June, according to senior government figures, who say the Treasury is sore about investing more money in the technology.

It was MPs on the House of Commons Public Accounts Committee that said the government’s support for “unproven, first-to-zero technology is high risk” and warned that taxpayers would not benefit from success if the carbon capture project.

Capture and storage of carbon involves capturing carbon dioxide during production, compressing and pumping it into the ground, sometimes pumping it into depleted reservoirs of oil and gas to avoid releasing it into the atmosphere. There are questions about whether CCS technology is commercial and actually feasible.

The PAC said the launch of CCS would have a “very significant impact on consumer and industry electricity bills” and urged ministers to assess whether this is affordable, as it is a greater pressure on the cost of living.

The government said the £21.7 billion of these projects will be taxed by energy bills and fiscal funds. Its goal is to attract another £8 billion in private investment.

But Energy Minister Sarah Jones told the Commons Energy Commission in December that the CCS target of the previous Conservative government was 2 million tons of Co₂t per year and by 2030, it would be "no longer achievable." Jones accused the Conservatives of insufficient funding in a letter to the committee.

Prime Minister Rachel Reeves and Treasury Chief Secretary Darren Jones were under scrutiny for the Carbon Capture Project as part of a review of all government spending.

One briefed the Treasury thought: "People will have to realize that they will not be able to do everything in the first semester they promise. There is not enough time in the fiscal packaging. They will look at carbon capture and storage and other things like thing."

Treasury insiders said that given the background of economic tensions, the case of further investment in CCS is still unclear. “We have to see if it works.”

Two people familiar with the project launch said the industry is looking for government leadership and whether further CCS plans may be prioritized.

"The government is gambling on carbon capture technology to become the basis for net zero," said Sir Geoffrey Clifton-Brown, President of the PAC. He added: "All early progress will be underwritten by taxpayers and, at present, they will not benefit if these projects are successful." .”

Climate Change Minister Ed Miliband has advocated carbon capture, but government insiders say he sees the development of the Sizewell C nuclear power plant as his top priority.

Ministers have promoted carbon capture, which is crucial to their regional growth strategy.

The government said in October that the first projects in Merseyside and Teesside would be "injected into the industrial heartlands of northwestern and northeast England".

Reeves told Financial Times in December that green energy investments, including carbon capture, represent one of her "big bets" for the economy outside the Southeast.

The recommendations for carbon capture are also roughly intertwined with the future of existing heavy industry in areas such as Hunber, according to three people familiar with the discussions between the energy sector and the government. One of the Carbon Captures added: "If you don't do this on Humber, you won't hit the 2030 net zero target."

"Carbon capture, usage and storage are crucial to improving our energy independence," the Ministry of Energy Security said, which the Climate Change Commission described as "necessity is not a necessity" to achieve our climate goals.

“There is no way to protect our industrial heartland and ensure the future of heavy industry in the UK.” The department said decisions about future CCS deployments will be made “at the right time”.