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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.

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.
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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.

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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.

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.

It has been welcomed by industry and the unions, coming just a week after job losses from the closures of Port Talbot Steelworks and Ratcliffe coal power station.

GMB general secretary Gary Smith said the news “shows what levelling up can really mean: good, well paid jobs reinvigorating communities”.

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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.

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Car manufacturers fined £461m for collusion

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Car manufacturers fined £461m for collusion

Major car manufacturers and two trade bodies are to pay a total of £461m for “colluding to restrict competition” over vehicle recycling, UK and European regulators have announced.

The UK’s Competition and Markets Authority (CMA) said they illegally agreed not to compete against one another when advertising what percentage of their cars can be recycled.

They also colluded to avoid paying third parties to recycle their customers’ scrap cars, the watchdog said.

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It explained that those involved were BMW, Ford, Jaguar Land Rover, Peugeot Citroen, Mitsubishi, Nissan, Renault, Toyota, Vauxhall and Volkswagen.

Mercedes-Benz, was also party to the agreements, the CMA said, but it escaped a financial penalty because the German company alerted it to its participation.

The European Automobile Manufacturers’ Association (Acea) and the Society of Motor Manufacturers & Traders (SMMT) were also involved in the illegal agreements.

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The CMA imposed a combined penalty of almost £78m while the European Commission handed out fines totalling €458m (£382.7m).

The penalties were announced at a time of wider turmoil for Europe’s car industry.

Manufacturers across the continent are bracing for the threatened impact of tariffs on all their exports to the United States as part of Donald Trump’s trade war.

Within the combined fine settlements of £77.7m issued by the CMA, Ford was to pay £18.5m, VW £14.8m, BMW £11.1m and Jaguar Land Rover £4.6m.

Lucilia Falsarella Pereira, senior director of competition enforcement at the CMA, said: “Agreeing with competitors the prices you’ll pay for a service or colluding to restrict competition is illegal and this can extend to how you advertise your products.

“This kind of collusion can limit consumers’ ability to make informed choices and lower the incentive for companies to invest in new initiatives.

“We recognise that competing businesses may want to work together to help the environment, in those cases our door is open to help them do so.”

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Customers ‘protected’ as household energy supplier exits market

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Customers 'protected' as household energy supplier exits market

A household energy supplier has failed, weeks after it attracted attention from regulators.

Rebel Energy, which has around 80,000 domestic customers and 10,000 others, had been the subject of a provisional order last month related to compliance with rules around renewable energy obligations.

The company’s website said it was “ceasing to trade” but gave no reason.

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Industry watchdog Ofgem said on Tuesday that those affected by Rebel’s demise did not need to take any action and would be “protected”.

Customers, Ofgem said, would soon be appointed a new provider under its supplier of last resort (SoLR) mechanism.

This was deployed widely in 2021 when dozens of energy suppliers collapsed while failing to get to grips with a spike in wholesale energy costs.

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Why is the energy price cap rising?

The last supplier to go under was in July 2022.

Ofgem said new rules governing supplier business practices since then had bolstered resilience.

These include minimum capital requirements and the ringfencing of customer credit balances.

The exit from the market by Bedford-based Rebel was announced on the same day that the energy price cap rose again to take account of soaring wholesale costs between December and January.

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Tim Jarvis, director general for markets at Ofgem, said: “Rebel Energy customers do not need to worry, and I want to reassure them that they will not see any disruption to their energy supply, and any credit they may have on their accounts remains protected under Ofgem’s rules.

“We are working quickly to appoint new suppliers for all impacted customers. We’d advise customers not to try to switch supplier in the meantime, and a new supplier will be in touch in the coming weeks with further information.

“We have worked hard to improve the financial resilience of suppliers in recent years, implementing a series of rules to make sure they can weather unexpected shocks. But like any competitive market, some companies will still fail from time to time, and our priority is making sure consumers are protected if that happens.”

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Harrods challenges survivors’ law firm’s compensation cut

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Harrods challenges survivors' law firm's compensation cut

Harrods is urging lawyers acting for the largest group of survivors of abuse perpetrated by its former owner to reconsider plans to swallow a significant chunk of claimants’ compensation payouts in fees.

Sky News has learnt that KP Law, which is acting for hundreds of potential clients under the banner Justice for Harrods, is proposing to take up to 25% of compensation awards in exchange for handling their cases.

In many cases, that is likely to mean survivors foregoing sums worth of tens of thousands of pounds to KP Law, which says it is working for hundreds of people who suffered abuse committed by Mohamed al Fayed.

Mohamed al Fayed. File pic: PA
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Mohamed al Fayed. File pic: PA

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Under a redress scheme outlined by the London-based department store on Monday, which confirmed earlier reports by Sky News, claimants will be eligible for general damages awards of up to £200,000, depending upon whether they agree to a psychiatric assessment arranged by Harrods.

In addition, other payments could take the maximum award to an individual under the scheme to £385,000.

A document published online names several law firms which have agreed to represent Mr al Fayed’s victims without absorbing any of their compensation payments.

More on Mohamed Al Fayed

KP Law is not among those firms.

Theoretically, if Justice for Harrods members are awarded compensation in excess of the sums proposed by the company, KP Law could stand to earn many millions of pounds from its share of the payouts.

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‘Many more’ likely abused by Fayed

A Harrods spokesperson told Sky News on Tuesday: “The purpose of the Harrods Redress Scheme is to offer financial and psychological support to those who choose to enter the scheme, rather than as a route to criminal justice.

“With a survivor-first approach, it has been designed by personal injury experts with the input of several legal firms currently representing survivors.

“Although Harrods tabled the scheme, control of the claim is in the hands of the survivors who can determine at any point to continue, challenge, opt out or seek alternative routes such as mediation or litigation.

“Our hope is that everyone receives 100% of the compensation awarded to them but we understand there is one exception among these law firms currently representing survivors who is proposing to take up to 25% of survivors’ compensation.

“We hope they will reconsider given we have already committed to paying reasonable legal costs.”

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Further claims against al Fayed

Responding to the publication of the scheme on Monday, KP Law criticised it as inadequate, saying it “does not go far enough to deliver the justice and accountability demanded by our clients”.

“This is not solely a question of compensation but about justice and exposing the systematic abuse and the many people who helped to operate it for the benefit of Mohamed al Fayed and others.”

Seeking to rebut the questions raised by Harrods about its fee structure, KP Law told Sky News: “KP Law is committed to supporting our clients through the litigation process to obtain justice first and foremost as well as recovering the maximum possible damages for them.

“This will cover all potential outcomes for the case.

“Despite the Harrods scheme seeking to narrow the potential issues, we believe that there are numerous potential defendants in a number of jurisdictions that are liable for what our clients went through, and we are committed to securing justice for our client group.

“KP Law is confident that it will recover more for its clients than what could be achieved through the redress scheme established by Harrods, which in our view is inadequate and does not go far enough to compensate victims of Mr al Fayed.”

The verbal battle between Harrods and KP Law underlines the fact that the battle for compensation and wider justice for survivors of Mr al Fayed remains far from complete.

The billionaire, who died in 2023, is thought to have sexually abused hundreds of women during a 25-year reign of terror at Harrods.

He also owned Fulham Football Club and Paris’s Ritz Hotel.

Harrods is now owned by a Qatari sovereign wealth fund controlled by the Gulf state’s ruling family.

The redress scheme commissioned by the department store is being coordinated by MPL Legal, an Essex-based law firm.

Last October, lawyers acting for victims of Mr al Fayed said they had received more than 420 enquiries about potential claims, although it is unclear how many more have come forward in the six months since.

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