Energy
Greenhouse Gas Removals Sector
“May I congratulate the hon. Member for West Dorset (Edward Morello) on securing a debate on this important topic? I thank him for all his engagement on this and many other issues, and for his leadership on the energy transition. In the rising noise in and outside this place against facts on the climate crisis in front of us today, it is genuinely a relief to have conversations with him about what we can do about the reality. On that, he makes a hugely important contribution to the House. In all my engagements with him, I come away having learned something new; I thank him for that. I will start where the hon. Gentleman started: by recognising that we cannot put off our response to the climate crisis to tomorrow. We are now living through extremely hot weather caused in part by the action that we did not take to tackle the climate crisis. While this is one of the hottest summers that we have lived through, it is almost certainly one of the coldest summers that we will live through, so every single step we can take to tackle this crisis should be taken. We absolutely need greenhouse gas removal technologies to reach net zero and to tackle the climate crisis. Such technologies give us a not just a huge opportunity to balance the residual emissions from hard-to-decarbonise sectors, but—as we have said throughout all of the work the Government are doing on the clean power mission and beyond—an exciting opportunity to grow our economy and secure new investment into the UK. When I say that, I mean all parts of the UK, including Northern Ireland, which the hon. Member for Strangford (Jim Shannon) rightly always challenges me on. This is not just the Government’s view; it is firmly the view of the Intergovernmental Panel on Climate Change and our own independent Climate Change Committee. That is why we are looking ahead and investing in these technologies. Last year, in our carbon budget and growth delivery plan, we set out how the UK will continue to reduce emissions in a way that lowers bills and secures good jobs, including developing and deploying GGRs at scale. We forecast 0.7 megatonnes of engineered GGRs deployed in 2030, with that figure increasing exponentially to 21.8 megatonnes by 2035. We are laying the groundwork now to support the massive growth that we expect to see in the 2030s, because, as exciting as these technologies are, they are new, and it will take a comprehensive and holistic policy framework to get us to where we need to be. I will set out six steps, many of which will respond to the points made by the hon. Gentleman. The first is providing support to incentivise private investment through a contractual revenue support mechanism. That is the GGR business model, designed to stimulate private investment in GGRs by providing revenue support under a contract for difference mechanism. It aims to capitalise on growing demand for high integrity GGRs in the voluntary carbon market and, in the longer term, in the UK emissions trading scheme, designed to enable the deployment of GGR projects at scale in the UK while ensuring at all times value for money for taxpayers. We are employing similar approaches to support energy from waste, with carbon capture and storage through the waste industrial carbon capture business model and large-scale bioenergy with carbon capture and storage, or BECCS, through our power BECCS business model. We are also exploring the case for financing GGR technologies not reliant on CO2 transport and storage infrastructure, such as enhanced rock weathering and CO2 mineralisation in building materials, as we recognise that there are a number of benefits to a diverse portfolio of GGR technologies. No decisions have been made on the particular intervention or mechanism. I want to reference the point that the hon. Gentleman has raised with me before and he raised today as well on the British carbon bank, or the idea of some kind of revolving fund. It is a serious idea that we will look at carefully, because we recognise that there is a real benefit to having that portfolio in place. We have already invested money, as I will come on to, but looking at interventions like that is important. We will continue to engage with him and the wider sector on how that could work. Secondly, we are introducing a new standard to ensure that investors and the public have confidence in these technologies. To complement the business models, we have commissioned the British Standards Institution to develop methodologies under an official UK GGR standard, and that is expected to be published next year. This is about making sure that carbon removals are genuine and verifiable, and having a standard in place so that we can objectively assess the viability and suitability of projects applying to the business model. The BSI development process generates high-integrity standards and benchmarks, bringing together industry specialists, academics and policymakers from across relevant sectors to produce a consensus-based final product. It is an example of a strong point made by the hon. Gentleman: everything we need to make this work is already here in Britain. The academics, the industry specialists, the skills and the capabilities are all here, and we just need to look at how we capitalise on those resources as quickly as possible. Thirdly, we know that carbon capture, usage and storage infrastructure is critical for enabling some of these technologies, and we have been committed to deploying CCUS at scale. I agree with my hon. Friend the Member for Middlesbrough South and East Cleveland (Luke Myer) about the need to capitalise on investment that we have already made, and to continue down that path by investing in these projects. In October 2024, just a few months after we took office, we made a significant funding commitment of up to £21.7 billion over 25 years to kick-start the CCUS industry here in Britain. GGR projects have been able to apply to the expansion of the HyNet and East Coast clusters through the HyNet Track-1 expansion process, the Teesside selection process and the non-pipeline transport pathfinder process—all very catchy names. I can already confirm that the HyNet Track-1 expansion includes two GGR projects that are in the negotiation phase of that process. Fourthly, we are investing in innovation. For many of these technologies, there is research that still needs to be undertaken and there are breakthroughs that are waiting to be made. We have already invested over £80 million through the direct air capture and greenhouse gas removal innovation programme and the UK Research and Innovation funded greenhouse gas removal demonstrator programme and its co-ordinating hub. The carbon budget and growth delivery plan committed to launching a series of cleantech innovation challenges that target mission-critical innovation. These will set specific, measurable, time-bound goals for innovation, co-owned with industry, which will mobilise public and private sector investment and focus policy efforts on creating the necessary market pull for new technologies and, in the process, de-risking those investments into new innovations. That leads me to the fifth point about how we stimulate market demand. We want to engineer GGR projects to generate high-quality carbon credits that can be sold on high-integrity negative emissions markets, and so we will maximise the opportunity for the voluntary carbon markets to channel private finance into those GGR projects. At COP29, we launched six principles for voluntary carbon and nature market integrity to guide organisations into taking voluntary action towards nature-positive and net zero goals. When we consulted on those principles with stakeholders, they highlighted that, in order to unlock the full potential of the voluntary carbon market, there is a need for greater clarity on the definition of high-quality carbon credits and how credits could be used in corporate net zero claims. Alongside the Governments of Singapore and Kenya, we are leading development of the Coalition to Grow Carbon Markets to strengthen corporate demand for high-integrity carbon credits, and anyone and everyone is welcome to join that coalition. Our long-term ambition is for a competitive negative emissions market, underpinned by demand in the carbon market and the UK emissions trading scheme. We have signalled our intention to include GGRs in the UK ETS. Last summer, the ETS authority published a response to the consultation on the inclusion of GGRs in the ETS, setting out further details on how we will do this. Finally, we are considering the findings of the independent review into GGRs that we commissioned last year under my noble Friend and all-round GGR and general energy expert and nerd, Lord Whitehead, who did fantastic work. I can assure the hon. Member for West Dorset and the House that that review is certainly not gathering dust on my desk; I have been flicking through it far too much for it to be gathering dust. I can say to the hon. Gentleman that the review includes many interesting and useful conclusions. We are taking time to go through them in detail, but we aim to publish the response this month. I am sorry that that is not quite an exact date, but I hope it is close enough. I hope that the steps that I have outlined today will reassure the House that this Government take the future of GGRs extremely seriously. We know that these technologies will be essential to reducing our emissions while growing the economy on the road to net zero by 2050, and that is why we are acting now. I want to conclude by coming back to the point where the hon. Gentleman started. It is absolutely critical that we rebuild, where we can, the consensus on acting on the most existential crisis that this planet faces. The climate crisis is not some future threat that we can have a theoretical debate about now and worry about later; it is a very real and pressing threat, and GGRs will play a really important part in addressing it. The Government are determined to make that happen, and there is an economic opportunity if we get this right as well. I absolutely commit to working with the wider industry, with the hon. Gentleman and with everyone else who has an interest in this fascinating subject in order to make this work.”
