Use £5bn oil and gas revenues to fund Acorn carbon capture – SNP

The UK Government must use £5.1 billion in forecast oil and gas tax receipts over the next year to fund the Acorn carbon capture project, the SNP has said.

The project in Aberdeenshire was due to receive £200 million in grant funding from Westminster but Chancellor John Healey changed the commitment to mean the UK Government would offer the same amount in loans or receive an equity stake in the project.

The SNP has described the move as a “betrayal”, while First Minister John Swinney said he was “deeply concerned”.

According to the Office for Budget Responsibility, the UK is forecast to raise £5.1 billion in revenue from oil and gas production in 2026-27. However, the forecast includes the Rosebank oil field and future discoveries, which have not been approved.

Ministers previously gave the green light to the Jackdaw field but are yet to make a decision on the much bigger Rosebank project.

SNP Westminster Group leader Dave Doogan urged the UK Government to fully fund the Acorn project (Jane Barlow/PA)

PA Wire

Dave Doogan, the SNP’s Westminster leader, said North Sea tax receipts should be used to fund the Acorn project.

He said: “The UK Labour Government has banked revenue from Scotland’s resources while at the same time defunding our principal carbon capture project.

“Every single penny from our oil and gas should be invested in Scotland and the starting point is the Acorn site in Peterhead.

“Westminster has robbed our trillion pound future from us and this week they repeated the trick – £5 billion syphoned off for investments in England while taking a sledgehammer to Scotland’s industrial future.

“This is a simple injustice known all too well to Scots – our energy robbed, hidden and squandered by Westminster while Scottish jobs are ruined while our energy bills go through the roof.

“Through a fresh start with independence we will choose to put the 80% of UK oil and gas production and the one third of UK renewable generation in our own hands – Scotland’s hands.”

Acorn, which could support about 15,000 jobs at its peak, proposes storing emissions from across Scotland under the seabed of the North Sea.

On Sunday, UK Government energy minister Martin McCluskey said it had been necessary to “reprioritise” budgets to prioritise investing in defence, but that the UK Government wanted to support the project.

“We awarded £200 million in grant funding at the last spending review,” he said.

“Some of that has already been drawn down by the developers, and the money that they’ve already drawn down remains in place.

“For the remainder, and for any future support, instead of it being through grant funding, it will be through loans and equities.

“Why are we doing that? We’re doing that for two reasons. Firstly, loans and equities are better value for the taxpayer. It means that perhaps we could choose to take a stake in that project, which would give a return to the taxpayer.

“But second, we’ve had to make some really difficult choices to reprioritise within budgets in order to fund the defence investment plan, which is obviously a priority for the Government.”

Mr McCluskey said the UK Government has had to “reprioritise” carbon capture and storage programmes right across the UK, and that a number of programmes have actually been stopped, not just reprioritised in terms of loans and equities.

He added: “We are making sure that there is support there for the Acorn project.

“We want that project to succeed, and the developers who I’m speaking to later this week will come forward with proposals, and that funding is on the table.”