UK Government will stand by funding for carbon capture project – minister

The UK Government is honouring its pledge to fund a key carbon capture and storage project in Scotland’s north east, the Chief Secretary to the Treasury has said.Speaking about £200 million previously promised by the Labour Government at Westminster to support the Acorn carbon capture and storage initiative, Emma Reynolds said that ministers “stand by that commitment”.Her comments came after business leaders in the north east of Scotland raised concerns about the funding in the wake of Wednesday’s UK Budget.Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce, said a loss of support would be “yet another hammer blow for the north-east Scotland economy”.And Scottish Deputy First Minister, Jenny Gilruth, said there must be “certainty and clarity” from the UK Government over the cash.Speaking on BBC Radio Scotland’s Breakfast programme, Ms Gilruth said: “That certainty on funding for investors and industry is really important, so the Acorn project and more broadly the Scottish cluster can move forward.”The £200 million funding was announced by then energy secretary Ed Miliband in June 2025 – with confirmation of the cash coming after the project had previously been overlooked for support.The scheme, which proposes storing emissions from across Scotland under the North Sea, had previously been overlooked for support despite repeated calls from the Scottish Government and others for it to be backed.Acorn, which could support about 15,000 jobs at its peak, proposes storing emissions from across Scotland under the seabed of the North Sea.PA GraphicsBosses at SSE have already said that progress on a controversial new, gas-fired, power station at Peterhead – which was consented to by Scottish ministers earlier this week – was “contingent” on the Acorn and the wider Scottish carbon capture and storage cluster proceeding.Read MoreMs Reynolds said, however, that the UK Government was looking to “push forward with this project”.Speaking on BBC Radio Scotland, the Chief Secretary to the Treasury said: “We are honouring the £200 million that was announced earlier this year, we know how important this project is to Scotland’s industrial future.”She continued: “This Acorn project and other projects in Scotland are critical to not just Scotland, but the UK’s industrial future and our plans to reindustrialise the country.“We allocated that money and we stand by that commitment.”Chief Secretary to the Treasury Emma Reynolds (right) spoke out the day after Chancellor John Healey (centre) announced his Budge. (Jordan Pettitt/PA)However, Ms Reynolds warned that other funding on top of the £200 million could be needed for Acorn to go ahead.She said: “There hasn’t been a cut to the £200 million, I can reassure you that that commitment stands.“That is the grant funding, but there could well be loans or equity stakes taken, because we will need probably additional funding to secure the future of this projects.“We’re not cutting the grant funding and we will probably need to look at some sort of financial transactions to secure the rest of the project.”Her comments came after Scottish Secretary Douglas Alexander told journalists there had been “significant challenges in relation to Acorn, both in relation to the market readiness of the technology and in relation to the commercial arrangements around the project”.