Minister defends '˜sensible' decision to cut Yorkshire carbon capture cash

A review by leading business consultants KPMG recommended support to exploit the “potential” of carbon capture and storage as it highlighted the role energy industries could play in growing the region’s economy in the coming decades.

The report comes four months after the Government announced it was scrapping its £1bn competition to support CCS in which the White Rose Project, centred on the Drax power station site, was one of two remaining schemes.

It had been hoped White Rose would create thousands of jobs and help establish Yorkshire as a world leader in CCS technology.

The decision to cut the funding was taken as part of George Osborne’s review of Government spending published in November.

Energy Minister Andrea Leadsom said: “I think the key point about the CCS project, the £1bn competition being withdrawn, was that it was a spending review decision, taken in the light of an assessment of all capital expenditure against the value for taxpayers money and that particular competition did not make the cut and that’s a perfectly valid and sensible decision in the context of a difficult spending round.

“That is not to say therefore that there is no interest in CCS and it is not continuing.”

Mrs Leadsom added: “We are looking at what our strategy will be towards CCS and we will have a new strategy for that by the end of this year.”

CCS involves the capturing of carbon emissions and storing them before they find their way into the atmosphere.

In Yorkshire, the focus has been on developing a pipeline network that would allow carbon emissions to be transported for storage under the North Sea.

The decision to scrap the CCS competition was criticised by a committee of MPs last year for damaging investor confidence while former Environment Agency chairman Lord Smith said the technology would be vital if gas, including shale gas from fracking, is to have a future.

TUC regional secretary Bill Adams said he hoped the promise of a new CCS strategy was not another “false dawn”.

“I welcome the fact that the government is apparently still interested despite the setback last year.

“Many of our industries face problems with emissions policy and energy costs. CCS would allow time to develop renewable energy systems and encourage investment in green technology, safeguarding thousand of jobs across the region helping to fulfil an election promise to rebalance the economy,” he said.

The report, commissioned by Northern Gas Networks and launched in Leeds today, said energy industries could play a huge role in future economic growth including through shale gas and offshore wind.