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The UK could still be a world leader on decarbonisation

Carbon capture expert Ruth Herbert on how to solve Labour’s green investment dilemma.

By Rachel Cunliffe

For Ruth Herbert, it all feels a bit like déjà vu.

Fifteen years ago she was a civil servant in the newly minted Department for Energy and Climate Change (DECC), working closely with the energy secretary Ed Miliband on an ambitious policy of “no new coal without carbon capture”. The plan was to insist on carbon capture, utilisation and storage (CCUS) technology on all new coal-fired power plants, building low-carbon capability into the heart of Britain’s energy sector. “It was really quite a trailblazing policy,” she recalled, setting up the UK as “leading international ambition on decarbonisation and climate change”.

The concept of CCUS – technology that is designed to trap the carbon dioxide emitted from power generation or other industry and either store it underground or use it for other purposes – was hardly new. The Sleipner project in Norway has been storing CO2 in saline aquifers since 1996. But the planned deployment was hugely ambitious.

It was an ambition that David Cameron’s Conservatives seemed to support when they entered government with the Liberal Democrats in 2010. The potential of CCUS was considered vital for the UK to meet its environmental goals and transition to a low-carbon economy. But the austerity agenda saw the project grind to a halt. Months of work had been spent negotiating between the government and companies involved in all manner of related industries. The contracts, Herbert told me, were “weeks away from being signed”. Companies had already invested millions of pounds and “were absolutely distraught”.

The policy made a comeback in the Conservatives’ 2015 manifesto, only to be cancelled again six months after the election, just days before the Paris Cop summit.

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Today, Herbert runs the Carbon Capture and Storage Association, the industry body representing organisations working on commercial-scale CCUS.

When we met in a restaurant around the corner from the CCSA’s Westminster office, she told me how close we are to realising the ambitions shelved a decade and a half ago – yet facing a frustratingly similar point of precarity. Part of Boris Johnson’s “ten-point plan for a green industrial revolution” was to deploy two CCUS clusters by the mid-2020s and a further two by 2030, with the potential to capture 20-30 million tonnes of CO2 a year. The plan was already announced when Herbert joined the CCSA in 2021; it took until March 2023 for the projects to be selected, with the announcement of £20bn in government investment. A year later, they are again waiting for the contracts to be signed as the government negotiates the final details of this drawn-out, legally complex process.

Some of the same companies that lost out in 2010 are involved this time around too, she told me. “And their feeling is: do we draw parallels between then and now?”

Herbert, 43, is probably not what you’d imagine if asked to picture a figurehead of the energy industry. Fresh-faced and bubbly in a stripy jumper and dangly earrings, she sipped mint tea and told me how as a child she wanted to be an astronaut. She studied physics at Oxford, where she turned down the traditional industries courting science graduates in favour of the civil service fast-stream – primarily so she could go travelling first (“I did not want to get a proper job at all!”). As luck would have it, her fast civil service job happened to be at the National Space Centre. “I used to get all these green-pen letters from all these strange people who had seen UFOs and had to do the official ministerial response,” she laughed, then paused for a moment. “I’m sure that there’s something out there, sure of it. But I can’t prove it.”

She was later moved to the Treasury, where she got “a front-row seat” to the collapse of Northern Rock, before spotting a job negotiating the EU directive on the geological storage of CO2 in 2007. “That was my first introduction to CCUS.”

It has been frustrating watching the UK squander the chance to be a world-leader on this technology and get ahead on tackling climate change. When Herbert first started working on climate policy, the Stern review on the economics of global warming had just been published. It argued that the worst impacts of climate change could be avoided if action was taken promptly, but that the costs would rise the longer this action was delayed.

“There was a ten- or 15-year window to invest early and mitigate that change before we started to really see the effects and then have to pay for adaptation like flood defences, increased food prices, those kinds of things,” she said. “I think, sadly, with the ten-year delay we’ve seen to deploy CCUS we’ve wasted that window that Lord Stern was offering us. Now we’ve got to mitigate, in parallel [with] paying costs of adaption at the same time. Unfortunately, our children – the next generation – are going to be shouldering a lot of that cost.”

But in news that will delight a cash-strapped incoming Labour government, this cost does not necessarily have to mean vast amounts of government spending, at least not to get CCUS started. “We’ve always said quite clearly that we don’t think we need lots of public sector capital,” Herbert stressed. What the industry wants from the government is certainty: a “contracts for difference” scheme by which the government agrees to pay the difference between the cost of deploying CCUS systems and the amount it can make in the early years until it is more profitable (as the technology becomes cheaper or the price of carbon rises), giving companies the confidence to invest. This was the model used, to great success, for offshore wind.

“In that ten years where CCUS was nearly started again,” she explained, “look what we did with offshore wind in that ten-year period. Renewables went from 5 per cent of electricity to 42 per cent in the time I worked on it. It’s phenomenal. I’m really proud to be part of that. I think we can do the same with CCUS.”

This idea – that the government can create the certainty and regulatory framework that unlocks private investment – could offer a chance for Keir Starmer’s Labour Party to solve one of its biggest dilemmas: how to achieve its climate ambitions without spending money the government doesn’t have. The party’s row-back in February on the flagship pledge to invest £28bn a year on green technology was a big disappointment to green campaigners. It was taken as a sign that Miliband, who looks on the verge of returning to government in his old role as energy secretary, had lost influence in the shadow cabinet, cowed by the all-powerful shadow chancellor Rachel Reeves and her Treasury mindset.

Herbert – who remains close to Miliband, though she declined to say whether she still has him on speed dial – believes this strategy could enable the government to progress with greening the economy while at the same time kick-starting growth. She reckons there’s £30bn that would come to the UK if the government gets CCUS contracts right, much of it to the declining industrial regions most effected by the failure of “levelling up”, and the opportunity to protect 77,000 existing jobs and create 70,000 more. All the government has to do is think creatively about the regulatory investment framework.

“It’s exactly the kind of market failure governments exist for,” she insisted. “They have to see the vision of the future.”

None of this is without its critics. The contracts for a difference model may not require upfront cash from the government, but the mechanism leaves the taxpayer liable if the technology does not become profitable in the time frame that has been forecast. The model has been hugely successful for offshore wind but proved costly elsewhere.

Right now, carbon capture remains hugely expensive and energy intensive. (One estimate suggests retrofitting the current prototypes on to a coal-fired power station would use up around 80 per cent of the electricity generated.) The cost of deploying carbon capture per tonne is higher than the carbon price, hence the need for government support until the technology improves and comes down in cost (as was the case with wind power) or the carbon price is raised.

Some environmentalists also suggest there should be more focus on reducing emissions by investing in clean power sources or using less energy altogether, rather than viewing CCUS as a “magic bullet” that can green dirty industries. Last year Mike Childs, policy director at Friends of the Earth, told New Statesman Spotlight the technology was “a Trojan horse pushed by the fossil industry to continue business as usual”.

When I put this to Herbert, she pushed back against the idea that it is not worth trying to decarbonise critical industries such as cement production or petrochemicals. “We have to demonstrate that we can achieve net zero without de-industrialising,” she argued. “The point about this is it’s a chance to decarbonise whilst growing the economy.”

What if it ends up much more expensive than anticipated? The UK, after all, does not have the best record when it comes to ambitious large-scale infrastructure projects. Herbert, who has first-hand experience of Treasury thinking, pointed out that benefits can be under-anticipated too. Take Crossrail in London. Since opening in May 2022, the Elizabeth Line, which took 13 years to build and cost £19bn, has proved far more successful than the original Treasury business case assumed and is on track to break even earlier than expected. “The Elizabeth Line has already vastly exceeded its expectations in terms of usage but also in the number of businesses that have built and invested around where it is,” Herbert explained. “They did the business case but it wildly underestimated the benefits.”

Construction of Crossrail, incidentally, began in 2009, around the time Miliband was enlisting Herbert in his plan to outfit new coal-fired power plants with CCUS technology. Somehow, she has retained her optimism throughout years of disappointment and delay, even as the very words used to describe the path to a greener future have been redefined.

“We used to say ‘combat climate change’. That’s not popular anymore,” she recalled. “I don’t know why. It feels like a battle.” She paused. “You have to have resilience, you have to keep going.”

[See also: How Britain legalised crime]

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