UK Government wants Acorn carbon capture and storage project success – minister
The project was due to receive £200 million in grant funding from the UK Government.
The UK Government wants to see the Acorn carbon capture and storage project succeed, a UK minister has said, after concerns were raised about the way it is being funded.
The project in Aberdeenshire was due to receive £200 million in grant funding from the UK Government, but Chancellor John Healey changed the commitment to mean the UK Government would offer the same amount in loans or receive an equity stake in the project.
Scotland’s First Minister John Swinney has said he was “deeply concerned” about changes to the funding mechanism.
Acorn, which could support about 15,000 jobs at its peak, proposes storing emissions from across Scotland under the seabed of the North Sea.
UK Government energy minister Martin McCluskey said it had been necessary to “reprioritise” budgets to prioritise investing in defence, but that the UK Government wanted to support the project.
He told The Sunday Show on the BBC: “We awarded £200 million in grant funding at the last spending review.
“Some of that has already been drawn down by the developers, and the money that they’ve already drawn down remains in place.
“For the remainder, and for any future support, instead of it being through grant funding, it will be through loans and equities.
“Why are we doing that? We’re doing that for two reasons. Firstly, loans and equities are better value for the taxpayer. It means that perhaps we could choose to take a stake in that project, which would give a return to the taxpayer.
“But second, we’ve had to make some really difficult choices to reprioritise within budgets in order to fund the defence investment plan, which is obviously a priority for the Government.”
Mr McCluskey said the UK Government has had to “reprioritise” carbon capture and storage programmes right across the UK, and that a number of programmes have actually been stopped, not just reprioritised in terms of loans and equities.
He added: “We are making sure that there is support there for the Acorn project.
“We want that project to succeed, and the developers who I’m speaking to later this week will come forward with proposals, and that funding is on the table.”