THE UK Government has announced it will be funding a carbon capture project in Aberdeenshire.
Chancellor Rachel Reeves confirmed the funding, although didn't specify the exact figure, as she set out her spending plans for the coming years in the Commons on Wednesday.
In total, the UK Governement said it is "allocating £9.4bn to UK carbon capture and storage over the Spending Review period", meaning the Acorn project's funding will be below that figure.
The Acorn Project based in St Fergus near Peterhead works with industrial, power, hydrogen, bioenergy and waste-to-energy businesses who wish to capture CO2 emissions and send them into permanent geological storage under the North Sea.
“These are investments to make sure the towns and cities which powered our last industrial revolution will play their part in our next industrial revolution, to reduce our reliance on overseas oil and gas and protect working families from price shocks," Reeves told MPs.
“A new generation of energy industries – for a renewed Britain. That is my choice. That is Labour’s choice. And that is the choice of the British people.”
There had been growing calls for the project to receive funding, including from Scotland’s First Minister John Swinney.
Reeves also announced a total of £52 billion for Scotland, £20 billion for Northern Ireland, and £23 billion for Wales, as she pledged the “largest settlements in real terms since devolution was introduced”.
Defence spending will rise to 2.6% by April 2027, Rachel Reeves also confirmed, as she said the UK will become a “defence industrial superpower”.
“A new era in the threats we face demands a new era for defence and security. That’s why we took the decision to prioritise our defence spending by reducing Overseas Development Aid so that defence spending will now rise to 2.6% of GDP by April 2027 including the contribution of our intelligence agencies," she said.
“That uplift provides funding for the Defence Secretary, with a £11bn increase in defence spending and a £600m uplift for our security and intelligence agencies. That investment will deliver not only security, but also renewal in Aldermaston and Lincoln; Portsmouth and Filton; On the Clyde and in Rosyth. Investment in Scotland. Jobs in Scotland. Defence for the United Kingdom, opposed by the Scottish National Party delivered by Labour.”
Reeves then also confirmed £4.5 billion would be invested in munitions in Glasgow, Glascoed, Stevenage and Radway Green.
She added: “We will make Britain a defence industrial superpower. With the jobs, the skills and the pride that comes with that.”
It is not clear from the 136-page document released by the Treasury how much funding the project will be given, a fact criticised by SNP Westminster leader Stephen Flynn (below).
“The SNP has campaigned for investment in Scottish carbon capture for over a decade, so it is welcome that after years of Westminster delays and funding snubs we have finally secured a measure of progress towards making the Acorn project a reality to create jobs and investment for our communities,” he said.
“However, the glaring omission in today’s announcement was any detail on the scale of funding and the timescales for delivery which stands in stark contrast to the £22 billion commitment the Labour Government has already given to carbon capture projects in England.
“Westminster has had 20 years to hammer out the detail on Scottish carbon capture, so it must now deliver meaningful funding and concrete support at pace.”
Urging the UK Government to display “a seriousness about Scotland’s energy industry”, Flynn added: “You cannot secure economic growth, energy security and net zero without harnessing the existing skills we have in our offshore industries and without proper investment in key projects like Acorn – the SNP will always demand our resources are used to the benefit the people of Scotland and an end to the absurd circumstances whereby energy bills are going up in our energy-rich country while energy jobs are going down.”
Aberdeen and Grampian Chamber of Commerce chief executive Russell Borthwick welcomed the news, saying he hoped the funding would “allow work to proceed on the project’s preliminary stages and move it forward”.
The Chancellor also announced up to £750 million in funding for the creation of a supercomputer at Edinburgh University which could be one of the most powerful in the world.
The plan had previously been scrapped by Reeves in the early weeks of her Government taking office.
Announcing the outcome of the spending review, Reeves laid out increased funding for the NHS and housing, stretching into the billions.
However, it remains unclear how the announcements will impact Scottish Government budgets this year.
Scottish Labour leader Anas Sarwar praised the spending review as “game-changing”, adding: “The plans set out today will bring billions of pounds of investment to Scotland, on top of the record budget settlement delivered in the budget.
“From the Acorn Project to a national supercomputer in Edinburgh to our defence industry, this Labour Government is investing in Scotland’s future while the SNP carps from the sidelines.”
