Making the macroeconomic case for CCS?

The UK’s decision to scrap its CCS commercialisation competition brings into sharp focus an urgent need to consider the economic service role of capture, transport and storage activities. In July 2016 a spending review briefing by the National Audit Office noted that, while agreeing with the Department for Energy and Climate Change (DECC) that CCS is required to meet UK carbon targets, “HM Treasury raised concerns about the merits of the carbon capture and storage competition given fiscal constraints”. We consider how some key omissions in the information provided to HM Treasury (HMT) by DECC may have contributed to the decision to cancel the competition, focussing around how the wider economic case was not fully made or communicated in an effective manner. Given that the UK Government seems to retain the belief that CCS is likely to be necessary and play a crucial role in the future energy system and low carbon economy, we argue that it is necessary to quantify solidly grounded scenarios for the role that the capture, transport and storage elements can play in an economic service context.