16:30 Mrs Maria Miller (in the Chair)

It is an honour to serve under your chairmanship, Mrs Miller. Two decades ago, when I was environment editor of The Times, a report came across my desk of a new-fangled concept called carbon capture and storage—CCS. I phoned an environment group, whose blushes I will spare, and asked them what they thought. They took a big pause, and then said, “We don’t like it.” I asked them why they did not like it. They said, “Not sure.” A few months later I wrote another article on carbon capture and storage; I phoned the same environment group and asked what they thought. They said, “We’ve worked out why we don’t like it now.”

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17:29 Anthony Browne (in the Chair)

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.

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 CO 2 removals. That might be controversial among some environmental groups, but it is simply irrational and unscientific to include CO 2 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 CO 2 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 CO 2 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.

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 CO 2 , 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.

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 CO 2 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.

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17:43 Alex Cunningham (Stockton North) (Lab)

I am absolutely delighted, with my Teesside and Humber colleagues, that we will be at the forefront of Britain’s carbon capture, utilisation and storage plans as part of the east coast cluster. I have long made the case that Teesside should be the home of the first cluster, because it offers the best opportunity to decarbonise industry of anywhere in the UK. With the east coast cluster, as everybody now knows, almost 50% of the carbon emissions in the UK could be removed.

I set up the all-party parliamentary group on carbon capture, utilisation and storage about seven years ago, when it was not exactly fashionable to talk about it. We wanted to ensure that the Government recognised the importance of CCUS in achieving net zero. To her credit, the former Energy Minister Claire Perry got on board, but she was badly let down by her Government and the then Chancellor, George Osborne, who at the stroke of a pen the night before Budget day set the industry back several years. Had he not stripped away £1 billion pounds of funding that dark day, we would already have a maturing carbon capture and storage industry and a much cleaner environment.

Earlier today I attended an energy-intensive industries roundtable on energy prices and listened to Debbie Baker from CF Fertilisers—the company in my constituency that found itself at the centre of the recent carbon dioxide crisis. It has huge energy costs, huge gas transportation costs and huge carbon costs as well. It desperately needs the Government to take action in those areas. I hope that the Minister will recognise that it will take a wee while before we get the CCUS infrastructure in place, so it is critical that other action is taken in the shorter term to ensure that we do not lose companies such as CF Fertilisers and those in other energy-intensive industries in my area and across the country.

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17:47 Peter Gibson (Darlington) (Con)

It is a pleasure to serve under your chairmanship, Mrs Miller. I congratulate my hon. Friend the Member for South Cambridgeshire (Anthony Browne) on securing and leading this important debate, shining a spotlight on the exciting prospects posed by carbon capture. This new technology will play a vital role in tackling climate change and reaching our net zero target by 2050.

The Government have already invested heavily in ensuring that carbon capture is used across the country. That is abundantly clear in Tees Valley, and I am grateful to the hon. Member for Stockton North (Alex Cunningham) for welcoming the Government’s steps there. Only yesterday, it was announced that the east coast cluster has been selected by Ministers to develop carbon capture facilities. I was delighted to learn that Net Zero Teesside, which will be based at Teesworks, will receive a share of the £1 billion carbon capture and storage infrastructure fund. That will enable the creation of the new common infrastructure needed to transport CO 2 from industrial plants across Teesside to secure offshore storage in the southern North sea.

Championed by our phenomenal local mayor, Ben Houchen, and spearheaded by local industry, the carbon capture cluster will remove 50% of the UK’s industrial cluster CO 2 emissions and support our national energy transition to achieve our net zero target. The project will capture 10 million tonnes of carbon—the equivalent of that produced by 3 million homes, while creating 25,000 skilled jobs by 2050 in a variety of sectors from construction to low-carbon technology. It is essential that the Government continue to invest in exciting technology to achieve their 2050 net zero target, and I welcome the steps already being taken in Teesside.

In conclusion, Darlington and the wider Tees Valley were there at the beginning of the first industrial revolution. Once again, we are centre stage in the clean, green revolution as we stride towards net zero, which carbon capture is central to.

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17:50 Kirsty Blackman (SNP)

The Scottish cluster is ready to go. We can make the track 1 timetable. The Government have accepted that we meet all the criteria. I do not understand why the Government have taken this decision in the face of the Climate Change Committee’s recommendations about how much carbon capture is needed to meet our climate change obligations, or even in order to meet the Government’s own climate change obligations.

I see absolutely no reason why the Government have chosen only two clusters. I am not criticising the fact that the Government are finally proceeding with CCS—I think that is great. However, it seems so arbitrary and deeply unfair that the Scottish one has been put in reserve, given that it is ready and given that we can progress it right now. I would love the Minister to answer why the Government have chosen to progress only two and, if they continue to progress only two and not move to three, how they will meet the storage obligations. How will they meet the carbon capture suggestions made by the Climate Change Committee, which the UK Government have said they will do? How will they meet those targets if they do not progress the Scottish cluster?

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17:54 Jill Mortimer (Hartlepool) (Con)

It is a pleasure to serve under your chairmanship, Mrs Miller. I am grateful for the opportunity to speak in this debate on carbon capture and storage, which follows the truly fantastic news that the UK’s first decarbonised industrial cluster—the east coast cluster—will be based in Teesside in the north-east. The cluster will provide the region with more than 25,000 jobs by 2050 and bring in upwards of £2 billion in investment. 9,000 jobs will be created in construction alone.

It is undeniable that carbon capture and storage, which has the potential to halve the cost of achieving net zero by 2050, will be crucial to ensuring that the UK meets its commitments on climate change. Furthermore, CCS is capable of producing hydrogen, which is the fuel of the future, with near zero greenhouse gas emissions. My Teesside colleagues present will know that my enthusiasm for hydrogen is one of the many reasons why I have been fighting so hard, both here in Parliament and in my constituency, for a new nuclear reactor for Hartlepool power station, beyond the current plans for decommissioning in 2024. Just as we cannot achieve net zero by 2050 without carbon capture and storage, we cannot do it without nuclear.

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17:57 Wera Hobhouse (Liberal Democrat)

It is in all our interests to stop climate chaos, and we must work together globally and nationally to find and implement adequate solutions. Carbon capture, utilisation and storage—CCUS—is the new big buzzword. As global warming is caused by emissions of carbon dioxide, a logical solution is clearly to capture the damaging gas. However, not all proposals are as sustainable in the long term as they seem. The Government have a clear favourite: to capture the CO 2 that is produced by burning fossil fuels, and to store it back in the Earth’s rock. It would allow Britain to continue extracting fossil fuels, burning them and pumping the carbon dioxide back into the seabed, where it is out of sight. That would be easy and very convenient for the existing fossil fuel industry, but not so fast. At best, it would not add to the carbon dioxide in the atmosphere. The question is: why not put all the much-needed investment into renewable energy, which is really where the future lies?

I do not disagree that we should be investing in renewable energy, but why should we not do both?

I thank the hon. Lady for that intervention, because it is always the argument that certain things are too expensive. All sorts of renewable energy production projects, including the use of tidal energy, have been rejected because they are too expensive. There is only so much investment that the Government can make, which we understand. Why not put it into renewable energies, rather than putting it into projects that keep the fossil fuel industry going? The Government should make it clear that the aim has to be to keep fossil fuels in the ground. They should do that now and support the development of renewable alternatives of power. It cannot be business as usual for the fossil fuel industry.

One of the possibilities is to combine CO 2 and carbon monoxide with green hydrogen and produce a synthetic fuel that could be used in aeroplanes. I have made that point to the aviation Minister, and I hope the Government are listening. The technology has been thought of by a number of universities, among them the University of Leeds. This synthetic fuel behaves in similar ways to traditional aircraft fuel and can even be mixed with it. It would be one solution for aviation to become net zero.

Any of these new technologies will need to overcome many hurdles and need millions in investment, but they exist and they open up the possibility of a truly circular economy that will be much more future proof. I urge the Government to look beyond short-term fixes to keep the fossil fuel industry going and to look at CCUS for negative or carbon-zero emissions as one of the great opportunities for getting to net zero.

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18:01 Miriam Cates (Penistone and Stocksbridge) (Con)

I start by welcoming the announcements made yesterday in the net zero strategy, which set out the UK’s plan for carbon capture and storage. Like my hon. Friend the Member for Hartlepool (Jill Mortimer), I am delighted that the east coast cluster has been chosen as a track 1 cluster that will benefit from the Government’s carbon capture and storage infrastructure funds over the coming years. I also pass on my congratulations to the University of Sheffield Advanced Manufacturing Research Centre, a partner in that bid.

The UK has committed to net zero by 2050, and we have become the first major economy in the world to pass legislation to reach such a target. The Government are right that we cannot reach that target by emissions reductions alone, so carbon capture and storage is vital to reducing our net output of greenhouse gases. It is simply impossible for many of our major industries to eliminate carbon emissions with current technology and energy use.

The Humber region is one of our most important industrial areas, but it emits 12.4 megatonnes of carbon a year, or 40% of the UK’s industrial emissions. These industries are vital to our economy and our security, as well as to jobs and livelihoods. While of course the Government should support and encourage industries such as steel to reduce emissions, we must be realistic about what is achievable. That is why projects such as Zero Carbon Humber, which has the potential to absorb 50% of the industrial cluster’s carbon dioxide emissions, are so important. This is a brilliant opportunity for UK industry, and with Government investment the commercial barriers to using our geological reservoirs for carbon storage can now be overcome.

In addition, the deployment of carbon capture and storage can deliver support for tens of thousands of new jobs, as many hon. Members have said. Not only is that good news for existing industries, but it offers huge potential for new ones. One of the key requirements for reaching net zero is to reduce our reliance on petrol and diesel cars and increase the use of electric vehicles. It is good news that £1 billion has been invested in Nissan’s plant in Sunderland, which aims to produce new generation all-electric vehicles in the not-too-distant future.

If James Durrans & Sons is successful—I urge the Minister to pursue Government support for this important investment—we could complete the EV battery production process here in the UK, securing our supply chain and, of course, adding value and creating jobs. However, like many high carbon-based industries, the project relies on the ability to capture and store the greenhouse gases produced.

That is why it is such good news for James Durrans & Sons and many other innovative companies that carbon capture is now a realistic prospect in the short term. As my hon. Friend the Member for South Cambridgeshire said, a science-based approach to carbon capture must be taken, so I am delighted that the Government have signalled such strong support for it. That is great news for our industries and for net zero.

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18:05 Alan Brown (Kilmarnock and Loudoun) (SNP)

It is a pleasure to serve under your chairmanship, Mrs Miller. I, too, congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on securing the debate, which is timely in the light of yesterday’s announcement about which CCS clusters the UK Government will progress.

It is illogical not to progress the Scottish cluster at this stage. The shipping and infrastructure proposals for Peterhead port, for example, were intended to facilitate the importing of carbon dioxide from outside Scotland, so the Scottish cluster can actually help other areas of the UK to decarbonise. Will the Minister advise why that aspect alone did not ensure that the Scottish cluster was given priority status?

Is the Minister aware that the Scottish cluster also includes Project Cavendish, which allows for hydrogen production in the south-east of England, not far from London? That London connection should be enough to make this UK Government think again on that decision. It is obvious, looking at what the Scottish cluster will achieve, that it should be given support now. Scotland has a world-leading target of net zero by 2020 and of cutting cut emissions by 75% by 2030. That interim target is now at risk because of the UK Government’s decision.

For the avoidance of doubt, the Scottish cluster will, if progressed, do the following. It will capture 25 megatonnes of carbon dioxide by 2030. It will tackle Scotland’s biggest two carbon dioxide emitters—Ineos at Grangemouth and the Peterhead gas station. And it will facilitate the production of blue hydrogen, as part of the clear pathway to green hydrogen. The UK Government talk glibly of leading the world on hydrogen, but they are quickly falling behind. If given the go-ahead, the Scottish cluster could deliver 1.3GW of hydrogen by 2030, which is more than a quarter of the UK and Scottish Governments’ 5GW production target.

The Scottish cluster also incorporates Storegga’s direct air capture proposals—technology that the UK could lead the world on and use as an effective offsetting methodology. The Scottish cluster also unlocks—again, on its own—30% of the UK’s carbon dioxide storage resource. That statistic should be sufficient for the cluster to be a No. 1 priority. Of course, it also best placed because it utilises existing oil and gas infrastructure. It could create more than 20,000 jobs by 2030—jobs that will facilitate a just transition and utilise the expertise built up in the north-east of Scotland.

As we have heard, the Committee on Climate Change and the International Energy Agency both state that carbon capture, utilisation and storage is practical for achieving net zero. The Committee on Climate Change says that progress in the UK will help lead the way elsewhere. That is why multiple projects need to be progressed in the here and now. It is the only way the Government can get on track for net zero and decarbonisation in the electricity system by 2035.

On net zero, the Minister needs to listen to the calls for a ring-fenced pot of money for the contracts for difference auction round 4 for wave and tidal to allow this industry to scale up and continue leading the world. I conclude by saying that the Scottish north-east Tories should hang their heads in shame at the Scottish cluster being overlooked. The Minister should apologise. I look forward to him hopefully admitting that he will reverse the decision and progress the Scottish cluster as a priority.

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18:10 Dr Alan Whitehead (Southampton, Test) (Lab)

I congratulate the hon. Member for South Cambridgeshire (Anthony Browne) on securing this debate and the exemplary way he put forward the case for carbon capture and storage—a case that has many other articulate exponents on both sides of the Chamber as well as him. My hon. Friend the Member for Stockton North (Alex Cunningham) particularly comes to mind. He has championed the cluster, CCS and all that goes with it over many years, and he is, I think, substantially responsible for the moves forward in CCS.

We do not need to spend much time clarifying among ourselves that the case for CCS is overwhelming. We are, after all, moving to a net-zero target. In this context “net” is a very important word. To achieve the net-zero target, we have to concentrate on not only keeping minerals and energy and such in the ground, but putting stuff back into the ground, and we have to think of methods of doing that, because there will be a carbon overhang in 2040, 2050 or whenever. The methods of doing that include growing trees and direct air capture, which has been mentioned, though that has to go in the ground as well. Other methods are CCS and bioenergy with carbon capture and storage, which involves attaching CCS to an already relatively low-carbon method of producing power, thereby making it net carbon-negative.

CCS is important across all these fields and the industry as a whole. It is not just a question of the power sector. Most heavy and energy-intensive industries will need CCS if they are to have lower-carbon processes; they have processes besides power production that produce a lot of carbon. It is important across the board. I was indeed pleased to hear in the statement yesterday that the north-east cluster and HyNet had secured strong backing for going ahead with precisely that combination of activity—with providing CCS for industry, or with providing the proper transport for CCS and then sequestration. It is important to recognise that there are a number of different components to CCS.

As the hon. Member for South Cambridgeshire said, this is not an experimental technique that we need to do a lot more work on. We know how it works. We know what we have to do and where we have to put CO 2 . The North sea, for example, has capacity to take 78 billion tonnes of CO 2 —200 years’ worth of the country’s CO 2 emissions. We know where it is going. As I have said, I have seen a full-chain CCS plant in operation at Boundary Dam in Saskatchewan, Canada. It captures the emissions it transports and sequesters them. What it does with the sequestered CO 2 is a matter for another debate. The system works really well and is complete. We should be aiming to get whole systems working together in those industrial clusters in the north-east and the north-west, so that everything works well for the benefit of industry, hydrogen production and low-carbon heavy industrial activities.

I want to emphasise that we are no longer in the chamber of discussion on CCS. We are in the chamber of action, and we need to apply that to as many things as possible, as soon as possible, in this country. In that context, I want to ask the Minister very briefly—

Very briefly indeed, Mrs Miller. What is the status of the various support measures that will be introduced for CCS? I have perused carefully the various updates on the design of the CCS infrastructure fund and the business models, but it seems to me that there is no clear line on the exact support to be offered to the different CCS sectors that I have talked about. There may be a contract for difference, for example, for heavy industry. That will need to be led by a 10-year plan, with a levy control framework or similar, but that is not in place.

There is no CfD in place, either. How is that coming on, and will the Minister guarantee that the arrangements will be in place as soon as possible so that we can roll out CCS as quickly as possible?

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18:17 The Minister of State, Department for Business, Energy and Industrial Strategy (Greg Hands)

We have already made huge progress in this country on decarbonising the electricity sector. In 2019, greenhouse gas emissions from electricity generation were down 13% on 2018 levels and were 72% lower than 1990 levels. Earlier this month, the plan to decarbonise the UK’s electricity system in its entirety by 2035 was confirmed by the Prime Minister and the Secretary of State, to help boost the country’s efforts to achieve its net zero ambitions.

Carbon capture, usage and storage has a key role to play in decarbonising the electricity system, but its role in supporting our ambitions to reach net zero by 2050 goes further than that. The industrial decarbonisation strategy, which we have already launched, marks the beginning of a process that will see wide deployment of key abatement technologies across industry. CCUS is, obviously, one of those key abatement technologies. It will be vital as we make this transition—something that is already acknowledged in our world-leading North sea transition deal, signed earlier this year.

The Climate Change Committee has described CCUS as a necessity, not an option, for the transition to net zero. We agree, and that is why in the Prime Minister’s 10-point plan for a green industrial revolution we set out to establish CCUS in at least two industrial sites by the mid-2020s and a further two by 2030 at the latest. CCUS is vital to transforming sectors such as steel—as was ably demonstrated by my hon. Friend the Member for Penistone and Stocksbridge (Miriam Cates)—cement, chemicals and other energy-intensive industries that lack viable alternatives to achieve decarbonisation. This summer we published the UK’s first ever hydrogen strategy, and we are moving forward quickly.

The net zero strategy, which was published yesterday, confirmed that the Government will set up a new revenue mechanism called the industrial decarbonisation and hydrogen revenue support scheme to fund industrial carbon capture and hydrogen projects, and to provide long-term certainty for private sector investment. The scheme will initially commit to awarding up to £100 million of contracts in 2023, and we will announce a funding envelope in 2022 that will enable us to award the first contracts to CCUS-enabled hydrogen. That was one of the key questions asked by my hon. Friend the Member for South Cambridgeshire. It will provide the certainty required to deploy CCUS at pace and at scale and will form part of a package of Government support, which will include the industrial decarbonisation and hydrogen revenue support fund and the £240 million net zero hydrogen fund.

To deliver our ambitions, we launched the phase 1 CCUS cluster sequencing process in May this year. Its aim was to provisionally sequence those clusters that are most suited to deployment in the mid-2020s. As we announced yesterday, following the phase 1 assessment, we have identified HyNet and the east coast cluster as track 1 clusters for the mid-2020s, with the Scottish Acorn cluster as a reserve cluster—I will explain what that means in a moment. This puts those places—Teesside, the Humber, Merseyside, north Wales and the north-east of Scotland—among the potential early super-places that will be transformed over the next decade. The track 1 clusters will be taken forward into negotiations, as the start of a process to determine their support under the Government’s CCUS programme. Those negotiations will allow us to confirm whether the clusters are affordable for Government, as well as whether they represent value for money for both the energy consumer and the taxpayer, prior to making final funding decisions.

“The UK Prime Minister’s 10 Point Plan established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest.”

Turning to the points raised during the debate, I praise my hon. Friend the Member for South Cambridgeshire, first of all for his excellent introduction. I know he likes his history and his science, and he gave us a masterclass in both. He has been combining the two from the first time he took a call on this topic while on The Times news desk. He is right about the potential for the UK to be a CCUS superpower, given the UK’s geology, geography and economy, and the interaction between those three things. I also thank him for praising this Government for being more committed than any other.

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