18:14 Ed Miliband (Labour)

By contrast, just three months since we came to office, this Government have turned promise into reality. I can confirm to the House that we have agreed commercial terms, and £21.7 billion of funding over 25 years for five carbon capture, usage and storage projects across two clusters: HyNet in the north-west, and the East Coast Cluster in the north-east. This announcement will enable the construction of two transport and storage networks that will underpin this new industry. The highways for carbon capture and the deals we have agreed will also kick-start development of Net Zero Teesside, the world’s largest gas with CCUS plant, and—these are both in Ellesmere Port—Protos, a new CCUS energy from waste facility, and EET Hydrogen, the UK’s first large-scale blue hydrogen project, which is the cleanest in the world. They will crowd in £8 billion of private investment across the two clusters, creating 4,000 jobs in our industrial heartlands and building an initial capacity to remove over 8.5 million tonnes of carbon emissions each and every year. I pay tribute to the six new Labour MPs in Teesside and colleagues across the north-west who have been brilliant champions for those projects. This is just the start; we will have more to say in the coming months about carbon capture sites in Humberside, Scotland and elsewhere around the country.

This investment is the right thing to do for Britain. CCUS will unlock the decarbonisation of hard-to-abate sectors, from chemicals to cement; enable the production of low-carbon hydrogen; and, by capturing emissions from gas-fired power stations, play an important role, alongside renewables and nuclear, in delivering clean power by 2030 and beyond. That is why experts in bodies ranging from the Climate Change Committee to the International Energy Agency are clear that carbon capture is critical to our meeting our climate commitments. There are those who doubt that. To them I quote James Richardson, the acting chief executive of the Climate Change Committee, who said on Friday quite simply:

“Reaching net zero will be virtually impossible without CCUS”,

“account for almost 20% of global CO2 emissions today”.

That is all part of the action of a Government who, in the last three months, have shown that we are in a hurry to deliver our mission to make Britain a clean energy superpower. We have lifted the onshore wind ban, consented to record amounts of nationally significant solar, launched Great British Energy, delivered the most successful renewables auction in British history, and set out our plans to lift more than a million households out of fuel poverty. We are moving apace, both because of the urgency of the challenges that we face and because of this Government’s determination to win for Britain. Last week marked the end of one chapter in our country’s energy story and the start of a new one—a new era showing that we can decarbonise and reindustrialise, a new era of clean energy jobs and investment in our industrial heartlands, and a new era of climate leadership. I commend this statement to the House.

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18:20 Claire Coutinho (Conservative)

In 2022, in the Energy Security Bill, we set out £1 billion of investment and the business models to support the CCUS market. Our aim was to have four industrial clusters by 2030. I must pay tribute to all who have worked together on those plans, including BP, Equinor, Eni, and all those involved with HyNet and the East Coast Cluster.

The Secretary of State says that CCUS was not funded. Let me remind him of the extent to which he is resting his laurels on a set of draft policy statements for nuclear from back in 2009 that had no Treasury funding attached. I had agreement that at least £20 billion would be spent following the next spending review. The Secretary of State is a former Treasury spad, so he knows what that means. As always, it is the cheap politics that he reaches for. He is, I am afraid, the ultimate career politician. In fact, the funding that we had announced, which would run for 20 years, was about £200 million more per year than what he has set out today. Can he confirm that the projects have not been scaled back, and if they have been, will he tell us where the losses will be?

We have also had no word on the track 2 clusters, Acorn and Viking, on which we were due to make progress over the summer; they were conspicuously absent from the Secretary of State’s statement. Many people will be deeply concerned, so can he update the House on those two projects? More widely, while his announcement rightly drew attention to the importance of British industry, both the TUC and the GMB have warned repeatedly about his net zero plans and what they will mean for British industry. In the words of Gary Smith, the leader of the GMB, the Secretary of State’s approach has been to export jobs and import virtue.

The Secretary of State has talked about the importance of UK decarbonisation in tackling climate change, but will he acknowledge that his plans to target UK production will not mean that we use less? They will just leave us importing more from abroad—importing more oil and gas from the United States and the middle east, and importing more steel from China, which is still 60% powered by coal. Will he acknowledge that both those developments will actually increase global emissions? It would be carbon accounting gone mad. It might leave some in the green lobby cheering at our reduced emissions, but overall there would be more carbon in the atmosphere and fewer jobs here in Britain. Is the Labour party seriously going to be responsible for the end of steelmaking in the UK, with the added cost of the loss of more than 10,000 jobs in our most left-behind communities? The Secretary of State must acknowledge that a better balance has to be found.

That is the reality. As for the other stuff that the right hon. Lady said, I think that she has a decision to make. She began her political career in the Conservative Environment Network, and she has ended up backing a net zero sceptic for the Tory leadership. I think it is a little bit sad. She should take some time to reflect on that, and on the utter contrast between her failure and this Government’s delivery.

I call the Chair of the Energy Security and Net Zero Committee.

The Secretary of State mentioned just how important it is that we have this technology if we are to decarbonise; he quoted James Richardson in making the case. It will be crucial for the abatement of heavy industries such as chemicals, glass—the Secretary of State went to visit a glass factory in the north-west on Friday—and cement, but it will also be crucial for hydrogen production, for the new gas-fired power stations and, indeed, for converting waste into energy. How long does he think we will need this technology for the abatement of heavy industry, and how long does he think we will need it for hydrogen production and production from gas?

I thank my hon. Friend for his question; he makes a really important point. Some people are sceptical about the use of carbon capture and storage. The truth is that for hard-to-abate industries—cement, for example—unless we have CCS technology, either there will be no future for these industries or they will not be able to decarbonise. Yes, it is an investment, but it is absolutely crucial, and I am struck by what the IEA said. We are talking about probably 20% of industry, and we are doing the right thing for Britain and setting an example to the world.

I always say on these occasions that, when it comes to blue hydrogen and gas with CCUS, we need all the technologies at our disposal on this decarbonisation journey. It is going to be a primarily renewables-based system, but nuclear has an important role and we need dispatchable decarbonised or low-carbon generation as well. All these things have a role, and the pathway will become clearer over time, but this issue is so urgent that I want to have all the technologies at our disposal.

I thank the Secretary of State for his statement. The Liberal Democrats are committed to supporting British industries in cutting carbon emissions and getting the country back on track towards meeting our climate targets. It cannot be emphasised enough how significant it is that this announcement comes at the same time as we hear about the UK being the first industrial nation to close its last coal-fired power plant. We had been dependent on coal for 150 years, so that is absolutely key.

It is clear that the future lies with renewables and clean energy, where we need to bring urgency and the necessary scale of investment. The Conservative Government’s irresponsible roll-back from key climate pledges, and their failure to invest properly in renewable energy and home insulation, has left thousands of households vulnerable to fuel poverty as another winter approaches. The failure to move forward at pace in decarbonising our industries, our transport and our homes has left us needing to take difficult decisions. We support the need, recognised by the Climate Change Committee, for at-scale, long-term investment in CCS, particularly for hard-to-decarbonise industries such as chemicals, cement and steel manufacturing. We would like to see investment in existing industries, and we want it to meet environmental requirements.

While we are discussing history, I should mention that it was my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) who launched carbon capture and storage, which was yet again cancelled by the Conservatives. However, although carbon capture and storage is a key tool in reaching net zero, it is also very expensive and complex, and evidence of its efficacy is still scant. Understandably, as the Secretary of State mentioned, there is much concern about the focus on incentivising industries to invest in CCS as an alternative to radically reducing their emissions. Therefore, it is important that the Government set out clearly and transparently the path to delivery for any CCS they invest in and show the milestones for progress. What will the Secretary of State do to increase investment—

On the hon. Lady’s broad points about CCS, my philosophy is that we want zero-carbon power where possible, but we also need carbon capture, particularly for hard-to-abate sectors and so that we can have not unabated gas, but gas with CCS or hydrogen power. She raises the question of cost. Imagine if we had had this conversation 15 years ago, when I was Secretary of State and much younger—15 years younger, to be precise. [ Interruption. ] Yes, I am good at maths. Some people were saying at the time, “Why are you subsidising offshore wind? It can never be competitive with fossil fuels.” Now, it is among the cheapest technologies to build and operate. That is what deployment does for us, and that is what the combination of public and private sectors working together does for us. Yes, there is an investment here, but a far-sighted, forward-looking Government have to make such investments, and I welcome the hon. Lady’s support.

I had rather hoped that my right hon. Friend was going to start his statement by saying, “As I was saying before I was so rudely interrupted—”. I have waited so long to hear a Secretary of State make such announcements from the Dispatch Box, and I am delighted. However, my right hon. Friend knows that carbon capture technologies reduce the energy intensity of fossil fuels by up to 25%, which makes such electricity much more expensive than that produced from renewables. Can the Secretary of State confirm that CCUS will be used not simply to allow the continued extraction of fossil fuel for our power sector, but only for the hardest-to-abate heavy industries and for the production of green hydrogen, thereby keeping domestic fuel bills low and delivering on this Government’s commitment to decarbonise our power sector by 2030 through much cheaper renewables and nuclear, not more expensive gas with CCUS? Finally, may I caution him against swallowing too much of the hype around blue hydrogen?

I thank my hon. Friend for his question; he speaks with great knowledge and expertise on these issues. He is absolutely right about the hard-to-abate sectors. I say to him what I said to the Chair of the Energy Security and Net Zero Committee, my hon. Friend the Member for Sefton Central (Bill Esterson): there is a role for both blue hydrogen and gas with CCUS, but that is within the context of a primarily renewables-based system that uses nuclear as well. It goes back to the point about needing all the technologies at our disposal if we are to surmount the challenges we face.

I thank the right hon. Gentleman for his question. I talked to the UK chair of ExxonMobil last week about this issue, and I believe that the Minister of State, Department for Energy Security and Net Zero, my hon. Friend the Member for Croydon West (Sarah Jones), is going to meet him later this week. For the benefit of the House, this was not in either track 1 or track 2—it was part of the Solent cluster—but we want all the projects to go ahead and the Solent cluster has real potential and is an important part of this. The UK chair told me that this temporary pause was certainly nothing to do with the actions of this Government, but, frankly, was to do with the time it had taken the previous Government to get going on this. I undertake to the right hon. Gentleman that we will continue our dialogue with the company about these issues, including on the more technical issues that he is talking about.

My hon. Friend speaks with great knowledge of this subject. She is unusual in this House, in that she is an engineer by background and actually knows about these issues. She is absolutely right about this. Our world-leading scientists and engineers are a crucial part of our playing a world-leading role in this technology. I also say to those who are worried about the risk of this technology that the much, much greater risk is in not acting. The risk before us is the climate crisis that grows every day, and it is the right thing to do to get CCS moving.

I thank the Secretary of State for his statement today. Could he say a bit more about how this important project will sit alongside other investments in green energy as we move towards the 2030 and 2050 targets? Could he also explain more about the potential for job creation across the country in a wide range of industries and regions?

On the hon. Gentleman’s first point, that is very much part of our plans for the future. On his second point, we will obviously set out all those details in response to the work of the Climate Change Committee. Frankly, one thing that we are struggling with is the delays under the last Government. I have set out the impact of this project and will be setting out the impact of future projects when they are announced.

The Secretary of State says he is absolutely committed to the Acorn project. Well, the way to show that would be to fund it, because yet again the UK Government have failed to announce funding for carbon capture utilisation and storage projects in Scotland. This is a disaster economically, industrially and environmentally. I am sure he will agree that without Acorn, the UK cannot meet its net zero targets and will miss them by some margin. The last Tory Government failed to back this project in Scotland for years, and despite offering change, Labour has done exactly the same thing, following the same path with broadly the same budget and prioritising less developed, less substantial and less deliverable projects in England while offering the Scottish cluster no funding at all to date. People in Scotland remember well how eager the Treasury and the Westminster Government were to get their hands on revenues from North sea oil and gas. When will we see that returned with investment from Westminster into the north-east of Scotland to support the Acorn project?

The hon. Lady is absolutely right, and it is why one of the projects we funded is an energy from waste project. This is exactly the kind of role that CCS can play.

Given the Chancellor’s rhetoric about black holes, it is perhaps a little surprising that the Government have managed to magic £22 billion for this, but I wish the Secretary of State well. I hope his plan works. Does he share my concern that, in doing this, we will reduce the drive to decarbonise industries, just as the use of waste incinerators has reduced the imperative to reduce, reuse and recycle waste, including in Westbury in my constituency?

I respect the right hon. Gentleman’s question, although I do not agree. First, this is a long-term investment in the country’s future, and I think the Chancellor is far-sighted in recognising its importance. Secondly, there are hard-to-abate industries that, without carbon capture, will find it very hard to enter a decarbonised world. We have to protect those industries, but I agree that, where industries can decarbonise without CCS, of course we want them to do so.

I welcome the Secretary of State’s statement, and I congratulate the trade unions, communities and campaigners that have campaigned for this for so long. His leadership stands in stark contrast with the asset-stripping of jobs, hopes and investment that we have seen in too many of our industrial heartlands. Does he agree that carbon capture is about not just net zero or boosting cluster areas, but boosting jobs, skills and futures in the supply chain in communities such as mine in Peterborough and across the country?

It is early, but I worry about the hon. Gentleman’s opposition to new grid infrastructure, so goodness knows what will happen to the renewables. He also opposes carbon capture, so goodness knows what will happen to the hard-to-abate industries. I am all in favour of investing in woodlands, but we need all of these things. I want to be generous to the Green party— [ Interruption. ] I am a generous person, and I am sure the Green party has the best of intentions, but the scale of the transition means this country needs all of these technologies. It is not about choosing to invest in the woodlands and not investing in grid infrastructure or CCS. I urge the hon. Gentleman to think about this, because we need all of these technologies.

I welcome the Government’s announcement on moving forward with the track 1 projects, which will create thousands of well-paid jobs, attract inward investment and accelerate us towards net zero. With the closure of the blast furnace at Port Talbot, the two largest carbon emitters in Wales are now in my Mid and South Pembrokeshire constituency, but they have no access to pipeline CO 2 transport. What measures is the Secretary of State taking to encourage the decarbonisation of sites such as those in Pembrokeshire, which rely on non-pipeline solutions for CO 2 transport, to achieve a just transition?

The Secretary of State has boasted about spending £27 billion of public money on carbon capture and storage, and on promoting what he calls renewable energy. Does he feel any sense of irony in taking £27 billion from a financial black hole and putting it into a carbon-absorbing black hole? Does he not recognise that his own green policies are generating the very CO 2 he condemns? The Drax B power station needs American forests to be chopped down and brought halfway around the world to be burned, emitting CO 2 , at a cost of £1 billion a year in subsidy.

This Government have shown in the last three months what can be achieved by rejecting the climate denialism that the last Government often seemed at risk of sliding into. However, this announcement is important because it underlines the opportunity we have to also reject climate delivery denialism—the idea that we can somehow make the transition to net zero work without making big, bold investments or by focusing only on narrow solutions that align with our ideological priorities. The International Energy Agency and the Climate Change Committee could not be clearer: CCUS is not just an economic opportunity for this country, but a scientific necessity if we are to meet our climate targets. Will the Secretary of State therefore leave no stone unturned and no opportunity off the table, doing everything we can not just to deliver on our targets, but to ensure that we make the most of the opportunity to reindustrialise parts of this country that have been neglected for far too long?

My hon. Friend makes such an important point. I was with the Prime Minister in New York in the last couple of weeks, talking to international partners about where the new British Government stood, and there is a sense that British leadership is back. However, if I had said to them, “We can’t do carbon capture; that’s just not an answer,” they would have said, “Well, what are we going to do about our industries?” My hon. Friend is absolutely right: we need to have all the solutions at our disposal, both for British leadership and for global decarbonisation.

The Secretary of State will know that it is vital that we reduce our global greenhouse gas emissions if we are to avoid the worst ravages of a climate crisis that is already manifesting. Given that this deal risks incentivising hard-to-abate businesses to continue with business as usual, will he outline what steps the Government intend to take to ensure that those industries also invest in reducing their emissions?

I welcome the hon. Member to the House. We have all kinds of projects in place to encourage business to decarbonise; indeed, our drive for clean power by 2030 is part of ensuring that we decarbonise the electricity system to help businesses to be part of the decarbonisation journey. However, I just do not recognise the picture that he paints—that this proposal is somehow a disincentive for companies. I hear lots of businesses asking how they are going to exist, frankly, in a decarbonised world. What is the answer, for example, for the cement industry in a decarbonised world? That is why CCS is so vital.

I welcome the Secretary of State’s enthusiasm for decarbonisation and carbon capture, particularly in heavy industry, including cement. However, the track 1 projects include new gas power stations and new blue hydrogen, which will carry a huge greenhouse gas penalty caused by upstream methane emissions. Will the Secretary of State therefore commit to reviewing the full-lifecycle greenhouse gas emissions for any project before it goes to a full investment decision?

I strongly welcome my right hon. Friend the Secretary of State’s commitment to delivering for Teesside and to delivering thousands of good green jobs in clean industries—delivery after years of delay. He mentioned Solent earlier, and he knows the risk that delay can pose to CCUS and to jobs. Does he therefore agree that it is absurd for the Conservative party to try to claim credit for this proposal after failing to deliver for 14 years, failing to commit any resources and leaving our industries in the lurch?

The Secretary of State will know that investment in these CCUS projects would not be possible without the private investment generated from our oil and gas companies. In the light of that, of him again confirming his policy on no new licences and of other policies that are set to close down the North sea, how will he ensure that that private investment continues so that more CCUS projects come forward in the future?

I welcome the Secretary of State’s statement, but carbon capture can be done in a number of ways. Anaerobic digestion plants, for example, produce as much CO2 as methane, which can be ducted into greenhouses to produce bigger tomatoes, cucumbers and lettuces. Will such natural carbon capture be included in the project, thereby helping to enhance our food security?

I am all in favour of big tomatoes and improving our food security. The hon. Gentleman makes an important point about the potential uses of CCUS. On Friday, we were at a glass factory that will be using hydrogen from a new project and will be the beneficiary of a decarbonised supply. I look forward to further discussions with the hon. Gentleman.

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