29th October 2026
Scotland is being asked to invest in carbon capture and storage, a technology that could help reduce industrial emissions and create new opportunities for the North Sea economy.
But there is a difficult question that deserves much more attention: are governments backing an industry that can become commercially viable, or are they committing taxpayers to decades of subsidies for projects that may never pay their way?
Carbon capture and storage, usually known as CCS, involves capturing carbon dioxide from industrial processes or power stations, transporting it through pipelines and storing it deep underground. Scotland has considerable advantages, including offshore engineering expertise, existing energy infrastructure and geological formations beneath the North Sea that could be suitable for permanent storage.
The technology is not simply an experiment. Carbon capture is already operating at some industrial sites around the world. The uncertainty lies in whether it can be deployed at the scale politicians envisage, at an affordable cost and without requiring continuing public support.
Acorn: Scotland's flagship project
The main Scottish initiative is the Acorn carbon capture and storage project at St Fergus, near Peterhead in Aberdeenshire. It aims to use infrastructure associated with the North Sea oil and gas industry to transport carbon dioxide for storage beneath the seabed.
The Scottish Government has previously committed up to £80 million to support Acorn's development. The UK Government had also announced £200 million of development funding in 2025.
These are substantial commitments to a project that has yet to become a fully operational carbon storage business. Further investment will be needed to build the infrastructure, attract customers and establish a reliable commercial operation.
The latest funding developments have added to the uncertainty. Following the UK Budget on 28 October 2026, the previously announced £200 million grant arrangement was being reconsidered, with loans or equity investment among the alternatives under discussion. The precise arrangements and the project's eventual investment decision remain important outstanding questions.
This illustrates the difference between announcing a project and delivering one. Political backing can help attract investors, but it cannot guarantee that the project will be built on schedule, operate at the expected cost or find enough customers willing to pay for its services.
The technology works, but does the business model?
One argument sometimes made against carbon capture is that it is unproven. That is too sweeping. The technology exists, and there are circumstances in which capturing carbon dioxide is likely to be necessary if emissions are to be reduced significantly.
Cement production is a good example. Some of its emissions arise from the chemical reactions involved in making cement, rather than simply from burning fuel. Switching to renewable electricity cannot eliminate all those emissions. Carbon capture could therefore have a useful role.
However, capturing carbon is only one part of the process. The gas must be compressed, transported and stored safely. Each stage adds costs and technical requirements.
The economics can become particularly difficult when a project depends on several other developments taking place at the same time. Industrial customers must install capture equipment, pipelines and storage facilities must be available, and there must be a commercial arrangement covering the costs.
If one part of that chain is delayed or abandoned, the rest can become less attractive financially.
Scotland also faces questions about the availability of customers. Potential industrial users must be willing to pay for carbon capture rather than pursue alternative ways of reducing their emissions. The future of the wider Scottish Cluster therefore depends on more than the availability of underground storage.
Who ultimately pays?
This is where the debate becomes particularly important for households and businesses.
The UK Parliament's Public Accounts Committee examined the government's carbon capture programme in 2025. It highlighted significant financial risks, concerns about performance and the scale of the proposed public support.
The committee reported that almost £22 billion of support was planned over 25 years for the first UK projects. This was a long-term programme commitment, not a sum already spent, and it related to the wider UK programme rather than Scotland alone.
Much of the planned support was expected to come through levies on consumers. That means the cost of carbon capture cannot be considered solely a matter for government departments or energy companies. Depending on the funding arrangements, some of the bill could ultimately reach households and businesses through their energy costs.
There is a legitimate argument for government helping a new industry through its early stages. Public investment has supported many technologies that subsequently became commercially successful. But the prospect of future benefits should not remove the need for financial discipline.
Ministers should explain how much public money is at risk, how much private investment is expected, and what will happen if costs rise or customers fail to materialise.
The danger of creating a permanent subsidy
The central concern is not that carbon capture must fail. It is that governments could become so committed to a project that they continue supporting it even when the original business case no longer looks convincing.
Once public money has been spent on development, pipelines and associated infrastructure, abandoning a project becomes politically difficult. Ministers may argue that further investment is needed to protect what has already been spent.
But money already spent is not, by itself, a reason to spend more. Each additional commitment should be justified by the benefits and costs expected from that point onwards.
There is also an opportunity cost. Money committed to carbon capture cannot be spent on other priorities. These might include electricity grid improvements, home insulation, industrial electrification, renewable energy or public services.
Some of these alternatives may deliver emissions reductions more cheaply in particular circumstances. The comparison should be based on evidence rather than an assumption that one technology must be the answer to every problem.
A potential opportunity for Scotland
There are nevertheless good reasons for Scotland to investigate carbon capture seriously.
The North Sea has the potential to provide geological storage, while the offshore engineering industry has experience in operating complex infrastructure. A successful carbon storage industry could create skilled jobs, provide new work for existing supply chains and help some industrial businesses remain competitive as emissions requirements tighten.
It could also give parts of the North Sea economy a future beyond the gradual decline of oil and gas production.
But those opportunities are not guaranteed. A storage resource is not the same thing as a profitable business, and an announcement of prospective jobs is not evidence that those jobs will materialise.
The Scottish Government should therefore publish clear milestones for Acorn and the wider Scottish Cluster. These should cover costs, private investment, contracted customers, expected carbon reductions and the conditions under which further public funding would be withdrawn.
There should also be independent assessments of whether the projected emissions savings justify the total public support, including the costs of operating the infrastructure over its lifetime.
Investment needs evidence, not just ambition
Carbon capture may prove an important part of the transition to a lower-carbon economy. But that does not mean every proposed project will be successful, or that taxpayers should carry whatever financial risks private investors are unwilling to accept.
Scotland has an opportunity to develop an industry that makes use of its offshore expertise and natural advantages. The challenge is to turn that potential into a credible commercial proposition.
The right approach is neither to dismiss carbon capture as a fantasy nor to assume that government support will make it succeed.
Before committing further large sums, ministers should demonstrate who will use the infrastructure, what it will cost, how the carbon savings will be measured and who will bear the losses if the project fails.
Carbon capture could become a valuable Scottish industry. But if its future depends on taxpayers repeatedly rescuing a business that cannot stand on its own feet, the public deserves to know that before the bill becomes much larger.