A £45 billion ($56.5 billion) funding gap is holding back Britain's green goals of capturing and storing carbon, The National has been told.
A target to bury 20 to 30 million tonnes of carbon per year by 2030 looks “very challenging” due to uncertain funding, according to energy consultancy Wood Mackenzie.
The UK's plan is to capture polluting gases from industries, such as steel and cement, that are particularly hard to decarbonise and store them deep underground or under the North Sea, curbing emissions into the atmosphere that contribute to global warming.
The emerging technology is backed by public money but is sometimes viewed with suspicion by environmentalists, who prefer immediate emissions cuts.
Energy Minister Graham Stuart told an offshore energy summit in Aberdeen, Scotland, that “there will be no net zero” without carbon capture, utilisation and storage.
Mhairidh Evans, a researcher on carbon capture at Wood Mackenzie, said the UK's carbon capture targets were “among the most ambitious in the world”.
But she told The National that negotiations had stalled between the government and the private sector on funding, with an estimated £45 billion ($56.5 billion) needed to build an initial four carbon capture “clusters”.
The huge cost of expanding what is a “relatively novel technology” is compounded by high energy prices, Ms Evans said.
Ministers have promised another £20 billion ($25.1 billion) of public money but talks with interested providers have ground to a stop over the details.
“The first two major projects that were meant to take an investment decision were meant to do so in 2022 and they still haven't been able to do that,” Ms Evans said.
“That process has been strung out to the point where it's now two years delayed and companies are still working towards a 2030 target. There is no more clarity around when companies can access the funding what they need.
“I think it's now at the stage where companies are very restless.”
Kamel Ben Naceur, a former Adnoc chief economist leading the offshore energy summit, said carbon capture was “seeing a large push” as countries look to reduce their carbon footprint.
“There needs to be a major boost in investment in developing low-carbon sources such as renewables, hydrogen and its derivatives and other forms such as nuclear – as well as developing technologies like carbon sinks, such as CCUS,” he said.
“The CCUS drive requires large-scale collaboration, innovation and appropriate regulation.”
Mr Stuart told the Offshore Europe summit that “traditional oil and gas companies” would lead the carbon capture push.
“It is in fact the oil and gas industry's expertise, the balance sheets, the engineering, the subsea capabilities that makes net zero possible,” he said.
“We are looking to you to help us grow another world-leading industry just as we did with oil and gas all those years ago.”