The government has pledged nearly £22bn to fund projects that capture greenhouse gases from polluting plants and store them underground, as it races to reach strict climate targets.
The plans are designed to generate private investment and jobs in Merseyside and Teesside, two industry-heavy areas that will be home to the new “carbon capture clusters”.
Prime Minister Sir Keir Starmer said the move was “reigniting our industrial heartlands by investing in the industry of the future”, though there are questions about how best to use this expensive technology.
Carbon capture, utilisation and storage (CCUS) has been developed to combat climate change.
It captures the planet-warming carbon dioxide released from burning fossil fuels or from heavy industry, and puts it to use or stores it underground.
Image: How CCUS can work, by capturing the carbon dioxide emissions from something like a gas plant or cement factory, transporting them through existing gas pipes, and storing them in a depleted oil or gas field under the sea
It is expensive and difficult, but the UK’s climate advisers, the Climate Change Committee (CCC), and United Nations scientists say it is essential to get the world to net zero, which the UK is targeting for 2050.
Net zero means cutting emissions as much as possible and offsetting or capturing the stubborn remaining ones.
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Today the government has committed up to £21.7bn over 25 years, to be given in subsidies to sites in the Teesside and Merseyside “clusters” – from 2028.
It will be split between three projects, which are capturing carbon dioxide released either from making hydrogen, generating gas power or burning waste to create energy from 2028.
The gas – up to 8.5 million tonnes of carbon emissions – will be locked away in empty gas fields in the Liverpool Bay and the North Sea.
The government hopes it will attract £8bn in private investment, create 4,000 direct jobs and support a further 50,000.
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Can carbon capture help fight climate change?
The cash will pay for fewer projects than hoped – the last government suggested a £20bn pot of money for similar projects – but the new administration says those plans weren’t properly costed, and the funding hadn’t been allocated.
The funding is to come from a mixture of Treasury money and energy bills, but the government has been coy about the split so far.
Questions on this might cause a headache for Labour, which has been complaining about an inherited £22bn budget black hole.
Sir Keir said the announcement will “give industry the certainty it needs” and “help deliver jobs, kickstart growth, and repair this country once and for all”.
Will it help jobs and business?
It hopes to fund the first large scale hydrogen production plant in the UK, and help the oil and gas sector and its transferable skills move over to green industries.
Does carbon capture, utilisation and storage (CCUS) work?
CCUS has made slow progress: promised for decades but barely scaled, with just 45 commercial sites globally.
However, it began to pick up in the last few years, with 700 plants now in some stage of development around the world.
The world’s first CCUS plant has stored CO2 under Norway’s waters since 1996, though elsewhere a few concerns linger about whether some projects leak gas.
James Richardson, acting chief executive of the CCC, said: “We can’t hit the country’s targets without CCUS, so this commitment to it is very reassuring”.
How should CCUS be used?
Some believe expensive CCUS should be preserved for areas like cement or lime-production, that are very hard to clean up in any other way, rather than for sectors for which there are greener alternatives.
Greenpeace UK’s Doug Parr warned of a “risk of locking ourselves into second-rate solutions”.
The government hopes this funding for the three sites that are ready to go will lay the foundations for further CCUS projects.
Sir Keir Starmer is reshuffling his cabinet following Angela Rayner’s resignation after admitting she had not paid enough stamp duty on the purchase of a new home.
She paid standard stamp duty on a flat she bought in Hove, East Sussex, in May after taking advice that it counted as her only home due to her disabled son’s trust owning the family home in Ashton-under-Lyne – but it was established she should have paid more.
Her resignation has left a hole around the cabinet table, which Sir Keir is now filling.
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The rise and fall of Angela Rayner
It was stressed early on Chancellor Rachel Reeves would remain as chancellor, in an attempt to stop the markets moving.
David Lammy – foreign secretary to justice secretary and deputy PM
After flexing his diplomatic muscles with Donald Trump and his deputy JD Vance over the past year, Mr Lammywill now move to the justice brief.
The move is likely to be a blow as the PM had promised, most recently in November, he would be foreign secretary for the whole parliament until 2029.
Although he is no longer holding one of the four great offices of state, he has also been made deputy prime minister, presumably to soften the blow.
Mr Lammy is close to Sir Keir, both as a friend and in his next door constituency, and was seen grinning as he went into Number 10 after being appointed.
Image: David Lammy is now justice secretary and deputy PM. Pic: Reuters
Yvette Cooper – home secretary to foreign secretary
The Labour stalwart had made tackling illegal migration a priority, so the move could be seen as a disappointment for her.
However, she remains in one of the four great offices of state – PM, chancellor, foreign and home.
Image: Yvette Cooper is now foreign secretary
Shabana Mahmood – justice secretary to home secretary
A big promotion, the straight-talking Labour MP will be tasked with tackling the small boats crisis and asylum seeker hotel protests.
She is no stranger to making difficult decisions, deciding to free criminals early to reduce prison overcrowding as justice secretary.
Her move makes it the first time all three great offices of state, after the prime minister, are held by women.
Image: Shabana Mahmood is now home secretary. Pic: PA
Pat McFadden – chancellor of the Duchy of Lancaster and intergovernmental minister to work and pensions secretary and head of “super ministry”
Often seen as Sir Keir’s “number two”, Mr McFadden will take over a newly formed “super ministry”.
It will include the department for work and pensions and the skills remit of the department for education – taking a large part of Education Secretary Bridget Phillipson’s brief and taking over from Liz Kendall as work and pensions secretary.
While it is not a promotion at first glance, it is a much wider role than he has had as chancellor of the Duchy of Lancaster – the highest-ranking Cabinet Office minister after the PM.
Image: Pat McFadden is work and pensions secretary and head of the ‘super ministry’. Pic: PA
Darren Jones – chancellor of the Duchy of Lancaster
It is the second new job in the space of one week for the new chancellor of the Duchy of Lancaster. The close ally of the prime minister was promoted from chief secretary to the Treasury on Monday to chief secretary to the prime minister. And now he gets another new job.
Image: Darren Jones is the new chancellor of the Duchy of Lancaster
Steve Reed – environment secretary to housing secretary
A promotion for the man who has consistently defended the government lifting inheritance tax relief on farmers.
He takes over one of the two major vacancies left by Ms Rayner and will have the massive task of building 1.5 million new homes during this parliament, as promised by the government.
Image: Steve Reed is now housing secretary
Jonathan Reynolds – business and trade secretary to chief whip
A slightly odd move for the MP seen as a steady pair of hands in his business secretary role.
He takes over from Sir Alan Campbell and will now have to hustle Labour MPs to vote with the government – something that has sometimes proved difficult with the current cohort.
Mr Reynolds will also attend cabinet, as is necessary so he can liaise between the party and No 10.
Image: Jonathan Reynolds is the new chief whip
Peter Kyle – science secretary to business and trade secretary
A promotion for Mr Kyle, who is taking over from Jonathan Reynolds.
He is seen as a rising star and impressed Labour MPs when he refused to stand down after suggesting Nigel Farage was on the side of people like Jimmy Savile by opposing the government’s online safety law.
Mr Kyle will be in charge of getting trade deals with other countries over the line.
Image: Peter Kyle is now business and trade secretary
Emma Reynolds – economic secretary to the Treasury to environment secretary
Probably the biggest promotion of the reshuffle, Ms Reynolds is taking on Mr Reed’s role after serving as a junior minister in the Treasury.
She will have to take on farmers and deal with the water companies – a big undertaking.
Image: Emma Reynolds is now environment secretary
Liz Kendall – work and pensions secretary to science, innovation and technology secretary
Pat McFadden has taken her role as work and pensions secretary, while Ms Kendall takes over Peter Kyle’s brief.
He has made AI a major facet of his role so we will wait to see which direction Ms Kendall takes the job in.
Image: Liz Kendall is the new science secretary. Pic: PA
Douglas Alexander – trade policy minister to Scotland secretary
A promotion for the Blair/Brown minister who returned to politics last year after being ousted in 2015 by then 20-year-old SNP MP Mhairi Black.
He takes over from Ian Murray, who has been removed from the cabinet.
Image: Douglas Alexander is the new Scotland secretary
Sir Alan Campbell – Chief whip to Lord President of the Council and leader of the House of Commons
An MP since 1997 and part of Tony Blair and Gordon Brown’s frontbench, Sir Alan is taking over Lucy Powell’s role.
He will be in charge of organising government business in the Commons – a sizeable job.
Who is out?
Lucy Powell has been sacked as leader of the House of Commons.
Ian Murray has been sacked as Scotland secretary.
Bridget Phillipson remains as education secretary but her brief has narrowed as Mr McFadden has taken over the skills part of her job.