Canceling the UK's carbon capture and storage competition may hinder meeting long-term climate change targets, increase costs to consumers and delay deployment of the technology until 2030, National Audit Office (NAO), the UK's public spending watchdog, warned on Wednesday.
The premature halt of government's support for CCS projects has erased the chance of the technology in "contributing meaningfully to decarbonization before 2030," the NAO said in a report commissioned by the Environmental Audit Committee.
"As a result, there is no viable way to achieve deep emissions reductions from the industrial sector in the near future," the NAO said.
In November 2015, the UK government axed the CCS commercialization program, which had earmarked GBP1 billion ($1.32 billion) in capital funding for new projects that could allow the safe removal and storage of carbon emissions from coal and gas plants before 2020.
The former energy department, known as the Department of Energy and Climate Change, and the Treasury had concluded the CCS competition would not guarantee further investment in the technology and assessed cost to consumers would be high and regressive.
The decision to withdraw support for CCS, which came as a surprise to the energy industry, has further dented investors' confidence and these precedents increase the risk that investors will be deterred from dealing with the government, the NAO said.
Also, the DECC advised the Treasury that it could cost the UK an additional GBP30 billion to meet the 2050 carbon targets without large-scale deployment of CCS, the NAO said.
"CCS is essential to meet our 2050 climate change targets," EAC Chair Mary Creagh said in a statement. "It is critical that government establish a new strategy for supporting large scale deployment of CCS, as without it, the eventual bill for cutting our carbon emissions could be up to GBP30 billion more."
The additional cost is likely to be incurred as a more expensive mix of low carbon technologies would be required to decarbonize the UK without CCS.
The NAO also raised concerns over the timeline for CCS project development in the UK.
"There is now less time to build the CCS infrastructure required for it to contribute to the UK's decarbonization target. This could increase the burden on the supply chain," which will significantly hike the cost of meeting the 2050 carbon goals, the NAO said.
