UK to spend $24 billion on domestic carbon capture projects to hit energy transition goals

(Bloomberg) — Chancellor of the Exchequer Jeremy Hunt will announce £20 billion ($24 billion) for domestic carbon capture projects over the next 20 years in his budget next week, as the UK seeks to hit its net zero targets and spur green jobs.

“It’s time for a clean energy reset,” Hunt said in an e-mailed statement, which also trailed plans to boost Britain’s nuclear power generation. The measures will “help drive energy bills down for households across the country and improve our energy security,” he said.

Investment in climate solutions such as carbon capture and storage (CCS) is becoming a competitive and controversial issue, with the UK fearing it will lose out to the U.S. due to President Joe Biden’s massive package of green subsidies. Biden’s Inflation Reduction Act offers subsidies and tax credits to the tune of $370 billion for a range of green technologies, enticing European firms to invest on the other side of the Atlantic.

Hunt said the UK’s investment in CCS would go toward projects that aim to store 20 million to 30 million tonnes of carbon dioxide annually by 2030, equal to the emissions of 10 million to 15 million cars.

Hunt will also announce plans in his budget on March 15 to boost nuclear power in Britain, including a competition for the country’s first small nuclear modular reactor. The UK is already investing £210 million in a reactor project by Rolls-Royce Holdings Plc.