The UK can be the birthplace of the world's first full scale Carbon Capture and Storage (CCS) demonstration plant, Alistair Darling said today.
Following the announcement in the Budget of a competition to build a full scale CCS demonstration plant in the UK, the Trade and Industry Secretary said:
"Carbon capture and storage has massive potential to allow us to meet our energy needs at the same time as cutting carbon emissions. It opens up huge possibility, not just for Britain but also but for the world.
"This is new technology for power plants, never done before on a commercial scale, but the UK is well placed. Depleted oil and gas fields in the North Sea are suitable for storage and we have world class expertise in geo-engineering.
"Gas and coal are important to the energy mix globally and in the UK. The Stern report was clear that, even with strong action on renewables and other low-carbon technologies, fossil fuels may still make up to half of the world's energy supply by 2050.
"CCS has the potential to reduce CO2 emissions from fossil fuel power stations by up to 90% and contribute 20% of global CO2 mitigation by 2050.
"Rapid deployment of CCS technology in growth economies such as China and India will be vital. This competition gives innovative UK industries the opportunity to become the leading exporters of CCS technology for the low carbon age."
More detail about the competition will be announced in the Energy White Paper in May and the result will follow next year.
Carbon Capture and Storage is a process by which the carbon in fossil fuels is captured either pre-combustion or post-combustion and committed to long-term storage in geological formations such as depleted North Sea oil and gas fields.
The UK Government is already at the centre of efforts at home and internationally to build understanding of the potential of CCS and to remove barriers to its development:
- A cross-Government taskforce is working to develop a regulatory regime to enable CO2 to be safely and legally stored on and off shore and to encourage capture-ready generation. A consultation on this will be launched later this year.
- The UK was instrumental in changing the London Protocol in November last year to allow CO2 to be legally stored in the marine environment. Working towards a similar agreement in June this year to amend the OSPAR Convention, which similarly governs North East Atlantic waters.
- First recipients to be announced later this year of DTI's £35m Carbon Abatement Technology demonstration fund, including CCS. £20m Technology Strategy programme funding is also going into clean energy technologies such as CCS.
- The UK and Norway are collaborating on a future regulatory regime for storage under the North Sea and looking at the possibility of joint infrastructure on the sea bed.
- The UK is actively pressing for CCS to be recognised in the EU Emissions Trading Scheme and supports its inclusion in the Clean Development Mechanism of the wider UN Framework Convention on Climate Change.
- The UK is leading the EU Near Zero Emissions Coal initiative helping to develop CCS demonstration in China. The Government has provided a £3.5m contribution to this project and is actively pursuing similar in India.
- The Stern Review estimates that CCS has the potential to contribute up to 20% of global CO2 mitigation by 2050. Furthermore, the Stern report estimates that to achieve stabilisation at 550ppm without CCS will increase costs by more than 60%.