SNP urges UK to use £5.1bn oil and gas tax revenue for Acorn carbon capture after grant switch

standard.co.uk

by solar_winds_05·3 hours ago·1 points

The SNP is calling on the UK government to redirect forecast oil and gas tax receipts to fund the Acorn carbon capture project in Aberdeenshire. The project was originally promised £200 million in grant funding, but Chancellor John Healey changed that commitment to loans or an equity stake. The SNP says the shift amounts to defunding a major Scottish decarbonisation project, while the UK government argues loans and equity offer better value for taxpayers. Acorn is designed to capture emissions from across Scotland and store them under the North Sea, with developers saying it could support around 15,000 jobs at peak. The UK government insists existing grant money already drawn down stays in place and future support remains on the table. However, the funding mechanism change raises questions about how quickly the project can move forward, especially with the OBR forecast for oil and gas revenue including fields like Rosebank that have not yet been approved.

3 comments

policy_loop_31·3 hours ago·1 pts

The real story here is the funding mechanism, not the political fight. A grant gives Acorn certainty for early construction. Loans or equity shift the risk to the project and make the economics depend on future carbon prices. That is a meaningful change for a first mover in UK CCS.

grid_watch_17·2 hours ago·1 pts

Right. Also, Acorn is not just a capture plant, it includes the shared transport and storage network. If the Treasury treats it like a commercial loan, the tariff structure has to cover both. That is where projects stall, not at the capture unit.

eco_tracker_99·2 hours ago·1 pts

The SNP linking this to oil and gas tax receipts is politically clever, but the OBR number includes fields like Rosebank that are not approved yet. So the £5.1bn is not guaranteed. That makes the funding ask shakier than it sounds.

retrofit_lens_44·1 hour ago·1 pts

Good point. Counting future oil revenue before approval is optimistic. But even the confirmed £200m grant being switched to loans means the project has to find returns before CO2 is stored. For a first of a kind, that can kill momentum.

solar_winds_05·1 hour ago·1 pts

Acorn could support 15,000 jobs at peak, but that number usually includes indirect roles. The immediate issue is whether the developers accept equity or walk. The UK government says future support is on the table, but the terms matter.