The UK Government has been criticised for scrapping plans for a £1bn fund tipped for a cutting-edge carbon capture and storage (CCS) scheme in Scotland.
A new report from the energy and climate change select committee warns of the lost economic potential for storing carbon in depleted North Sea oil wells.
Two projects were in the running for the funding, a Shell and SSE-backed development in Peterhead and the White Rose scheme at the Drax power plant in North Yorkshire.
The Peterhead development, which could have created up to 600 jobs and helped dispose of up to 15 million tonnes of harmful gasses, was widely considered the front runner for the project.
Under the plans, carbon dioxide which would otherwise have been released into the atmosphere would have been captured at Peterhead Power Station and pumped 62 miles out to sea to the Goldeneye platform.
The compressed gas would then have been stored in depleted gas wells under the North Sea.
Following the November announcement the fund was being scrapped, Shell said it “no longer sees a future” in the scheme.
The Westminster report, published on Wednesday, highlights concerns the decision will prompt a delay in the development of CCS technology in the UK.
It also warns dropping the fund could make it more challenging for the UK to meet its climate change commitments which were agreed in Paris.
The document outlines that although CCS technology is ready to pilot on power stations at a large scale, “large upfront investments” are needed to support the transportation and storage infrastructure needed to carry the carbon dioxide.
It said the decision has led to a “missed opportunity” not only for CCS but also to generate additional revenue for existing oil and gas assets in the North Sea.
The inquiry was told empty North Sea oil fields could potentially store European industrial emissions for the next 100 years.
Committee chairman Angus MacNeil MP said: “If we don’t invest in the infrastructure needed for carbon capture and storage technology now it could be much more expensive to meet our climate change targets in the future.
“Gas-fired power stations pump out less carbon dioxide than ones burning coal but they are still too polluting.
“If the government is committed to the climate change pledges made in Paris it cannot afford to sit back and simply wait and see if CCS will be deployed when it is needed.
“Getting the infrastructure in place takes time and the government needs to ensure that we can start fitting gas fired power stations with carbon capture and storage technology in the 2020s.”
Mr MacNeil added: “This is the latest in a series of snap decisions that have damaged confidence in the Government’s energy policy.”
The committee is calling on the Department for Energy and Climate Change (DECC) to assess the financial and other benefits of using existing North Sea oil and gas infrastructure to facilitate CCS on a commercial scale.
The report calls on the government to devise a new strategy for CCS alongside a new gas strategy.
It also recommends the department should engage with the National Infrastructure Commission to look at options for the development of carbon transport and storage.