UK Carbon Capture Funding Faces Scrutiny Ahead of Budget

Chris Packham has urged HM Treasury to redirect £24bn in carbon capture support towards other climate measures ahead of the Budget, The Guardian reports.

The intervention comes amid growing uncertainty over the next phase of Britain’s carbon capture, usage and storage programme. Earlier in October, energy minister Martin McCluskey told an industry conference that financial constraints would require choices about which projects proceed and how quickly.

For manufacturers, energy companies and infrastructure investors, the issue extends beyond the size of government subsidies. Decisions on shared carbon dioxide transport and storage networks could influence which industrial sites can access the technology and when they can implement their emissions reduction plans.

Understanding the Funding Commitment

The programme is overseen by the Department for Energy Security and Net Zero (DESNZ). Its initial funding package, announced in October 2024, committed up to £21.7 billion over 25 years to support the first projects within the East Coast Cluster and HyNet.

That historical commitment should be distinguished from the broader spending figure now under discussion. It represents support extending across decades, rather than expenditure within a single financial year.

In its February 2025 examination, the House of Commons Public Accounts Committee reported that approximately three quarters of the initial financial support would come through consumer levies, with the remaining quarter funded by the Exchequer. This financing structure makes affordability relevant to both taxpayers and energy customers.

Major Energy Companies are Developing the Infrastructure

The East Coast Cluster connects planned capture facilities in Teesside and the Humber with offshore storage infrastructure. Its transport and storage network is being developed by the Northern Endurance Partnership, whose shareholders include BP, Equinor and TotalEnergies.

The associated Net Zero Teesside Power project is a separate venture involving BP and Equinor. It combines gas-fired electricity generation with carbon capture, with operations expected to begin in 2028.

When the government announced financial close for the first Teesside projects in December 2024, it identified approximately £4 billion in construction and supply-chain contracts. That figure represented commercial contracts associated with building the projects, rather than an additional government funding allocation.

In north-west England and north Wales, Eni’s Liverpool Bay CCS project provides the transport and storage infrastructure for HyNet. The Carbon Capture and Storage Association (CCSA) reports that the network reached financial close in April 2025.

The association also identifies capture projects that have reached financial close at Heidelberg Materials UK’s Padeswood cement works and Encyclis’s Protos energy-from-waste facility. These illustrate the programme’s reach across power generation, construction materials and waste treatment.

Scotland’s Acorn Project Remains Part of the Debate

The Acorn Transport and Storage Project, based at St Fergus, is intended to serve the Scottish Cluster by transporting captured industrial carbon dioxide to permanent storage beneath the North Sea.

The Scottish Government states that the UK Government announced £200 million in development funding in June 2025. Progress towards a final investment decision remains subject to project readiness and affordability. Scotland has separately committed £80 million to support Acorn’s development.

Friends of the Earth Scotland has challenged this spending priority. In a June 2026 statement, its oil and gas campaigns manager Rosie Hampton argued that ministers should prioritise warmer homes, public transport and employment linked to established climate measures. The organization also criticised repeated delays associated with Acorn. These are campaign positions, rather than independent findings about the project’s eventual performance.

Campaigners Question the Balance of Public Investment

Oil Change International has also challenged public subsidies for carbon capture. Its research argues that such support can extend the operation of fossil fuel infrastructure and divert resources from other emissions reduction measures.

A December 2025 factsheet, published with Corporate Europe Observatory, ReCommon, Real Zero Europe and Fossil Free Politics, examined European public funding for carbon capture and fossil-based hydrogen projects using the technology.

The criticism raises a practical question for funding decisions: whether a particular project addresses emissions that are difficult to eliminate through other means, or supports activities with viable alternatives. That distinction requires assessment at project and sector level.

Parliamentary Scrutiny Highlights Delivery Risks

The Public Accounts Committee’s 2025 report warned against excessive dependence on carbon capture to meet national climate targets. It identified uncertainty around costs, delivery schedules and the performance of the first projects.

The committee also reported that DESNZ had acknowledged its original ambition to capture and store 20 million to 30 million tonnes of carbon dioxide annually by 2030 was no longer achievable.

Its recommendations included regularly reassessing value for money, improving performance reporting and concentrating support on applications with limited alternatives, including cement and lime production. The report provides an accountability benchmark, although it predates subsequent project developments.

Implications for Industrial Decarbonization

The CCSA’s 2025 delivery update identified more than 100 projects in development, representing potential annual capture capacity of 77 million tonnes. These figures describe a development pipeline, rather than operating capacity or guaranteed emissions reductions.

The association also identifies Harbour Energy’s Viking CCS project and connections involving National Gas Transmission’s SCO₂T Connect as elements of the wider infrastructure programme.

For businesses, the funding debate underlines the need to distinguish proposed infrastructure from contracted access and operational services. For policymakers, the central test is whether each commitment delivers measurable emissions reductions at an acceptable cost while maintaining credible alternatives if projects are delayed.

The Budget will therefore be assessed on both spending levels and the clarity it provides about project selection, delivery expectations, and responsibility for financial risk.

Sources:

• https://www.theguardian.com/uk-news/2026/oct/27/chris-packham-chancellor-scrap-spending-fairytale-carbon-capture-budget

• https://publications.parliament.uk/pa/cm5901/cmselect/cmpubacc/351/report.html

• https://www.ccsassociation.org/ccus-in-action/ccus-in-the-uk/