Energy leaders have called for an urgent meeting with government ministers to discuss concerns about the potential impact of the £22 billion investment in carbon capture, utilisation, and storage (CCUS) projects on household energy bills.
In an open letter to the secretary of state for energy security and net zero, prominent industry figures – including members of the Heat and Building Business Council (HBBC), which includes the likes of Octopus Energy, Aira, Energy Saving Trust, along with industry partners such as Good Energy and the MCS Foundation, have cautioned against plans to pass on the costs of these projects to households via levies on energy bills.
‘While we fully support industrial decarbonisation, the proposed funding approach raises serious concerns about its impact on households,’ the letter stated. ‘Existing levies on household bills are already making it harder than necessary to decarbonise heat’.
A key issue raised by the group is the lack of clarity over how the £22 billion investment will be divided between treasury funding and consumer levies. The leaders stressed that greater transparency is essential to building public trust and ensuring public support for the government’s decarbonisation strategy.
The Institute for Fiscal Studies (IFS) has estimated that taxpayers will contribute over £14 billion to subsidise clean energy production, equating to a cost of £120 per household annually. In their election manifesto, Labour pledged to reduce household energy bills by £300 per year. Signatories to the letter are urging the government to honour this commitment and are questioning how introducing additional levies on households aligns with this promise.
Chair of the heat and building business council and head of policy at energy Saving Trust, Stew Horne, said: ‘We support the UK government’s recent announcements regarding carbon capture and storage projects to support industrial decarbonisation. However, it is important that the costs of these projects are not passed onto people’s energy bills via additional levies.
‘Existing levies on energy bills are already contributing to concerns around affordability and adding anymore costs onto these will only exacerbate this. Additional levies will also continue to make it harder and less attractive for households to switch to decarbonised heat, particularly for the most vulnerable. We would therefore like to see more clarity on how costs will be split between the Treasury and consumer bill levies.
‘The UK government has been clear about its intention to both reduce energy bills whilst meeting its net zero goals. That is why we are seeking a meeting with the secretary of state to gain clarity and collaborate on solutions that ensure they achieve this.’
Comments