Fuel fund collapses as steel maker axes plant

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A funding competition worth £1.2bn intended to encourage a wave of carbon capture and storage (CCS) facilities across Europe has collapsed into chaos after the final scheme in the running was axed.

Just days after the UK Government revealed it had failed to secure EU funding for even one of its proposed CCS projects – despite Yorkshire being host to the best-ranked scheme in Europe – steelmaker AccelorMittal announced it was not going ahead with its planned low-carbon steelworks in France.

The French project had originally been ranked bottom by the EU on a shortlist of eight CCS schemes which were bidding for funding from Brussels.

Top of that list was a proposed “clean coal” power station at Hatfield, near Doncaster.

Several other UK projects had also been in the running – including a second CCS power station at Drax in North Yorkshire.

However, in a move which sparked huge outcry in South Yorkshire, the UK Government failed to offer sufficient guarantees to the EU that it would match-fund any successful projects, and so missed the funding opportunity altogether.

That had left the way open for the steelworks in northern France to scoop a 250m euro windfall and become the first low-carbon steelworks in the world.

However with AccelorMittal pulling out yesterday, Brussels now looks set to spend the money on other renewable energy schemes instead.

Doncaster Mayor Peter Davies said: “It looks like the European Union has significant funding available, but no place for it to go.

“The Government’s inept decision making has cost Doncaster and the Yorkshire region significant investment at a time when it is really needed.

“We had their number one ranked project and they offered millions of euros to a project in France which was ranked bottom of their list. You could not make this up.

“We could have helped the UK lead the way in this new technology, but instead the UK will fall years behind.”

On Tuesday, the Yorkshire Post reported that the Government had been branded as incompetent over its handling of the entire project in the UK.

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