Manufacturers association EEF has criticised the withdrawal of carbon capture and storage (CCS) funding, fearing it will hit the steel and cement industries.
EEF was reacting to the publication of an Energy and Climate Change select committee report, which said investors in the technology were losing confidence as a result of the funding being removed.
The Government had originally announced £1bn capital funding to support the initial stages of commercialisation but this was withdrawn in the Chancellor’s November budget.
As a result, two projects previously awarded contracts by the Government, the White Rose facility in North Yorkshire and Peterhead power station in Scotland, were cancelled.
EEF energy and climate policy head, Claire Jakobsson said: “For many sectors, such as steel and cement, there are simply no other options available for cutting emissions.
“No Government support for CCS locks many industrial sectors into a carbon intensive future paying increasing amount in carbon taxes and puts them at a competitive disadvantage.
“We are running short of time if we are to have any chance of an industrial CCS programme in the UK and the Government needs to come up with a strategy fast.”
She said the committee’s report reinforced “short sightedness” over the decision, which would make it diffucult for the Government to meet future targets for decarbonising industry.
Committee chair Angus MacNeil called on the Department of Energy and Climate Change to produce a new strategy for the technology to ensure carbon savings by the 2020s.
“Only last week Ministers rejected the need for such a strategy, but the industry and investors are crying out for this certainty,” he said.
“Ministers must set out exactly how much of their planned new gas capacity is to be retrofitted with CCS and by when. And the Government must let investors know when CCS projects will be able to apply for guaranteed-price contracts alongside other low-carbon energy schemes.”
Environmental campaigners delivered a petition with 113,000 signatures to energy secretary Amber Rudd before financial backing was withdrawn.
The Yorkshire project was for a thermal generating station, an ultra-supercritical oxy-fuel coal-fired power plant of up to 448MW with the ability to co-fire biomass, at the existing Drax site, pictured.