UK Decarbonisation and Carbon Capture and Storage — [Mr Clive Betts in the Chair]

Part of Backbench Business – in Westminster Hall at 3:11 pm on 24th January 2017.

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Photo of Tom Blenkinsop Tom Blenkinsop Labour, Middlesbrough South and East Cleveland 3:11 pm, 24th January 2017

I congratulate Philip Boswell on securing this debate. His contribution was really good, technically sound and showed his background in the subject.

First, let me state that carbon capture and storage is an absolutely necessary component of the solution to our energy trilemma. It offers the opportunity to meet our emissions targets, provide energy security and take advantage of the natural resources and high-level skills of our nation. It is necessary because any conceivable energy future will require the burning of fossil fuels.

I encourage anyone who doubts the significant and important role that hydrocarbons will continue to play in meeting the UK’s energy needs to read Lord Oxburgh’s report. He concludes that to meet our heating needs we must continue to rely on natural gas, produce huge quantities of hydrogen gas or supply heat through electrification, which in turn would require new fossil fuel power stations. Any of those paths will produce large amounts of CO2 and will therefore require effective carbon capture technology to meet our environmental targets.

The main challenge in developing such essential technology is achieving value for money. As the recent National Audit Office report found, the Government’s carbon capture technology competitions did not offer that. I hope, however, that the Government accept that the technology is still necessary to meet our environmental targets and will commit to creating a more cost-effective approach to building the technology in the UK, rather than letting CCS innovation, research and expertise leave the UK and create jobs, investment and opportunities elsewhere—that the Government are willing to take on some of the risks of developing the new industry in order to reap the economic and environmental benefits down the line.

I hope that in designing a new CCS competition, the Minister will take on board the NAO report’s findings to improve clarity on the risks carried by projects and on the financing the Government are willing to commit to, as well as draw on the lessons learned through stakeholders. I also hope they will look closely at the work done by the Carbon Capture & Storage Association, which points to circumstances under which CCS technology can offer value for money—namely, the strike price of £85 per MWh recommended by the Lord Oxburgh report—from the start.

I am interested to hear what other options the Minister has considered for implementing CCS, such as the possibility of doing so as part of a business model that relies on utilising indigenous sources of hydrocarbons, such as gasified coal. In short, I hope that the Government continue to explore options for supporting this vital technology. I know there are Members from all parties who would support them in doing so.

Finally, I want to point to areas where carbon capture technology is already proving cost-effective. Carbon capture and utilisation technology captures CO2 produced by manufacturing plants or smaller generators and uses that CO2 to produce highly marketable green products. A British company, Carbon Clean Solutions, currently leads the world in this technology and, as I am sure the Minister is aware, has recently successfully implemented CCU technology on a commercial basis in Tuticorin, India. Carbon Clean Solutions has successfully managed to take the CO2 produced by a chemical plant and produced soda ash, which in turn can be used to make glass, paper and a range of other products. The fact that the soda ash produced is green means it can be sold on at a premium to companies attempting to reduce their environmental footprint.

It seems bizarre that such technology, developed by a British company in co-operation with British universities and in part funded by grants from the British Government, has not been helped to take root in Britain. Although I understand that the technology does not operate on nearly the same scale or offer the same environmental impact as larger CCS projects, it also has advantages. For example, the smaller scale of the project means a smaller risk for investors. Indeed, Carbon Clean Solutions believes it requires only a guarantee on initial investment to get started in Britain, and that in turn offers the Government the opportunity to learn lessons in carbon capture technology that can then be fed into the development of larger projects.

Although the nationwide impact of CCU technology may be small, such technology could help our energy-intensive industries to reduce their emissions and give them a competitive edge. Furthermore, much of the infrastructure needed for CCU is already in place in former and current industrial areas such as Teesside. If we were to look at this project in combination with decarbonising our economy by using the gas grid, we would see a multitude of potential options for the existing energy-intensive industries to take hold of and entrench their position and also develop new green industry. That is a particular advantage, given that the NAO report highlights the “lack of supporting infrastructure” as a major barrier to investment in larger CCS projects.

Electrification obviously implies a vast amount of capitalisation—in the trillions—and a lot of capital to begin to even touch the sides of electrifying our transport, but we are the one nation in the world that has a unique gas grid that we could utilise in combination with hydrogen gas and shale gas, and using blends within the gas grid to overcome those obstacles.

Will the Minister meet me and Mr Ani Sharma, the chief executive officer of Carbon Clean Solutions, to discuss the potential of his company’s technology and how the Government can help CCU technology to mirror its commercial success in India closer to home? Carbon capture and utilisation may not have the environmental impact that successful large CCS projects would, but it can act as a stepping stone to achieving those vital CCS projects that are the only way we will be able to move towards a decarbonised energy sector.