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Government Urged to Impose Carbon Capture and Storage Levy

By Rob Hull on October 14, 2010

A carbon capture and storage project in Poland

Businesses, policymakers and environmental experts are lobbying the coalition Government to impose a levy on domestic energy bills in order to fund a £4bn investment in carbon capture and storage (CCS) plants.

According to some experts, carbon capture and storage technology is the key to a greener future; furthermore, without carbon capture and storage developments, the UK is expected to struggle to meet its legal obligations to reduce carbon emissions by 2020. Carbon capture and storage describes the process of capturing and burying the carbon dioxide produced by the burning of fossil fuels in power stations to generate electricity. The act of burying carbon dioxide emissions deep within the Earth is intended to reduce carbon emissions without having to rely on renewable energy technologies, such as those concerning solar power and domestic wind turbines.

Plans for the levy were drafted by the former Labour Government under the Energy Act 2010, which was passed before the General Election in May with the backing of the UK’s three major political parties. Coalition spending cuts, however, could force the Conservative and Liberal Democrat parties to end the levy, which would inflate the public expenditure in a time of austerity. Energy experts and businesses, including Shell and Siemens, have moved to persuade the Government to press on with the levy.

David Kennedy, the Chief Executive of the Committee on Climate Change, claimed that the £4 billion for carbon capture and storage demonstration plants would be “money well-spent”.

Mr Kennedy said: “If you don’t have these [carbon capture and storage demo plants] you have to ask is it feasible to decarbonise the electricity supply in the 2020s?”.

Professor Jon Gibbins of the University of Edinburgh added: “We are not moving very fast. The biggest obstacle is uncertainty”. Professor Gibbins also mentioned his fear that a failure to impose the lobby would “send a disastrous message”.

In March, Labour’s former energy and climate change secretary, Ed Miliband, who is now the opposition party’s leader, claimed that investment in carbon capture and storage would generate 100,000 jobs and generate up to £6.5 billion per year by 2030. In an age of public spending cuts and rising fuel costs, homeowners in the UK are unlikely to support a carbon capture and storage levy that would increase domestic electricity and gas central heating bills ahead of winter.