asked Her Majesty’s Government:

In view of the increase in fossil fuel usage worldwide, why they are not proceeding faster with the application of carbon capture and storage technology.

My Lords, the Government announced in the Budget in March 2007 that a competition for commercial-scale demonstration of carbon capture and storage is expected to be launched in November this year. As indicated in the recent energy White Paper, we intend the UK’s first CCS demonstration plant to be up and running some time between 2011 and 2014. Current indications are that we will be among the first, if not the first, in the world to do so.

My Lords, while it is satisfactory to note the Government’s support for this important technology, is not the competitive route a somewhat leisurely approach to it, in view of the fact that no less than 87 per cent of all the energy presently consumed in the world is in the form of fossil fuel and that in China alone two new large coal-fired power stations are being commissioned every week? Is it not regrettable that the BP plant for carbon capture at Peterhead in Scotland has been scrapped because of the delay in the formulation of government policy when it was one of the most advanced of its kind in the world? Are there not half a dozen other projects at various stages of development? Why cannot the Government adopt an incentive scheme similar to that provided for renewables to get these projects going and thus generate substantial commercial prospects, both in Britain and abroad?

My Lords, the noble Lord is right that this technology has the prospect of reducing carbon emissions by 28 per cent by 2050 for the whole of the world’s emissions and therefore it is a very important technology indeed. The Government have opted for a competition because accepting the BP project would have obliged us to put all our eggs in one basket. It is important to get the technology right, given its significance for future progress, in not just the United Kingdom but the world.

My Lords, is not the situation even worse than that described by the noble Lord, Lord Ezra? Is the Minister aware that last week I received a letter from his colleague, the noble Lord, Lord Rooker? Because this project is no longer viable, it cannot be put on permanent hold due to the geology of the Miller field. The noble Lord, Lord Rooker, told me that the project was not even being considered as a possible opt-in for the European emissions trading system and would never be able to benefit from the carbon credits available under that system. Is that not a hugely damaging missed opportunity by the Government?

My Lords, as I indicated in my Answer to the noble Lord, Lord Ezra, the Government were faced with two choices. One was to support the BP project as it stood and accept that as a decision indicating the Government’s very significant support. The support that the Government will give to the winner of any competition will be measured in hundreds of millions of pounds and will be a very important development. The Government had a choice between accepting the BP project or holding an open competition in which, as the noble Lord indicated, there are several significant competing technologies and bids. The Government have opted for the latter, due to the need for the security of getting the technology right for the next 40 to 50 years.

My Lords, is the real reason for not proceeding with carbon containment that the Greenland ice core evidence now proves that atmospheric carbon increases are the effects of global warming, not the cause of it, or is it that, just as firemen cannot subdue the heat of a blaze by catching the smoke, Kyoto-inspired Governments now realise that they are unlikely to reduce global warming by containing atmospheric carbon, particularly if solar radiation, not terrestrial industrialisation, is found to be the prime cause of global warming?

My Lords, the noble Lord recognises that the science of climate change is complex, but there is no doubt at all that there is significant scientific proof of the advantage to the world of dealing with carbon storage capture and the development of clean coal. That is against a background of China in particular, and India, having enormous numbers of coal-burning power stations. That is why this technological breakthrough is so important but, as the noble Lord indicated, other issues are at stake. We are discussing this technology in relation to one very important dimension of the problem.

My Lords, I get a bit fed up with a lot of the cribbing at our energy industry. Does my noble friend agree that we are one of the world leaders in energy? As a former director of Drax power station, one of the largest coal-fired stations, I can say that we are now completely up to date with many things. Should there not be more co-operation between government departments, especially the Department for Environment, Food and Rural Affairs?

My Lords, my noble friend is typical of those on the Labour Benches who speak up for Britain and its achievements. He is right in saying that we should recognise that, even with the timetable for this competition, Britain will be in the lead in developing this technology when it comes on stream between 2011 and 2014. I recognise that my noble friend emphasises the need for co-operation between departments and across technologies and across nations in order to deal with this massive problem of climate change.

My Lords, considering that new power stations are being designed, should there not be a regulatory requirement for any new power station to be carbon capture and storage ready, given that many of them being designed at the moment are not? I congratulate the noble Lord on taking up the Liberal Democrat policy on the DTI, but will implementing that policy cause any hold-up in the bid for carbon storage and capture?

My Lords, the Government move seamlessly on their productive way and there is therefore not the slightest problem of any hiatus in their achievements in energy policy over the change of government effected over the past few days. As for the new power stations, of course it will be recognised that we have to reach the stage when we can utilise the technology of carbon storage. It is right, however, to look ahead in the development of new power stations in order that as far as possible they are consistent with it.

My Lords, we agree with the words of the noble Lord, Lord Taylor of Blackburn. It is a terrible thing when we see our own great companies foundering because of the lack of co-operation between departments. How badly does the Minister feel, as I do right now, that we will not give permission by the end of the year in order that the Miller oilfield will be viable? It will not be viable for BP if the Government hesitate any longer.

My Lords, great companies are not foundering, they are part of consortia bidding in this competition to provide the most successful technology we can employ. Anyone who thinks that BP is foundering has a very odd perspective on the success of that company.