Speaking at the Carbon Capture and Storage Association's annual conference, Energy Minister Martin McCluskey put it plainly: the clean-energy push is crucial for the economy, but the budget is tight. "It is no secret that we are operating in a challenging fiscal environment, and this government remains committed to meeting its fiscal rules," he said. He added that as the CCUS sector grows, "the requirement for government subsidy will need to reduce if it is to be sustainable for the long term."
The message comes as ministers look to rein in spending and subsidies across the industry. McCluskey said that may require decisions on the "priorities, sequencing and pace" of projects.
When fiscal choices matter, stay informed with the free Market Briefs newsletter that explains markets and policy in minutes
The government is under pressure to pare public spending on carbon capture and some other low-carbon efforts while it looks to identify more than £2 billion in savings at the Department for Energy Security and Net Zero to help pay for higher defense costs. Carbon capture is among the department's largest outlays, with £9.4 billion of capital funding set in last year's spending review. Officials are assessing alternatives in the run-up to the Oct. 28 budget.
London has already committed support for the East Coast and HyNet clusters. Their goal is to collect carbon dioxide emitted by industrial facilities and move it for long-term burial beneath the North Sea and Irish Sea. Other schemes - among them Acorn in Scotland and Viking in Humberside - have long grappled with doubts about whether government support will continue.
Because small shifts can affect plans, get the free Market Briefs to understand economy, stocks, crypto and real estate quickly
