To ask Her Majesty’s Government what progress is being made with carbon capture and storage.

My Lords, the Government continue to promote the development of carbon capture and storage technologies. The CCS competition remains on track, and we are committed to an operational project by 2014.

My Lords, does the noble Lord agree that carbon capture and storage has now moved centre stage having regard to the fact that many new coal-fired stations are likely to be constructed both here and elsewhere and, on the other hand, that we are committed to a 20 per cent carbon reduction by 2020 and 80 per cent by 2050? In these circumstances, should the Government not be expanding their efforts and testing out other aspects of CCS? Can he indicate what progress has been made in other EU countries, especially Germany?

My Lords, the noble Lord is absolutely right to draw attention to the importance of carbon capture and storage. My understanding is that the International Energy Agency estimates an increase in global coal demand of 73 per cent by 2030, driven mostly by China and India. Therefore, there is great potential in the UK developing and putting into practice technology not just for reducing carbon emissions in this country but as regards export opportunities. I know the noble Lord is concerned that we have selected one technology in the competition that we have started, but we have had to focus our efforts in a particular area. We think that the post-combustion technology that we have chosen is the right one because it is the most globally relevant.

My Lords, the climate change package that was agreed in Europe in December contains a specific commitment to invest the revenue raised from auctioning 300 million allowances in up to 12 carbon capture and storage demonstration projects. How will the UK Government take advantage of that in relation to the questions asked by the noble Lord, Lord Ezra, about diversified interests and investment?

My Lords, the noble Lord is absolutely right to report the outcome of the negotiations in Europe, which we believe were very encouraging and in which the UK played an extremely proactive role. Clearly, the next question is how the UK will take advantage of the allowances that will be made available. We already have a competition process in place. We have chosen a technology which we think is the right one.

My Lords, does the Minister accept the judgment of the International Panel on Climate Change that carbon capture and storage could account for up to 55 per cent of the global carbon reduction targets? It is a huge percentage. But does he also accept that there is growing impatience among industrialists in this country not only in the energy industries but in other high emitters such as cement and iron and steel at the painfully slow progress that seems to be being made in the Government’s policy in this regard? We do not even know who the winner of the competition is. When will we know that?

My Lords, I cannot give an exact date for that because we are in the competition process. There is no doubting the fact that this is very important: it is important in terms of this country meeting the hugely challenging targets to reduce emissions and in terms of UK jobs and skills. The Government are not at all complacent. The UK played a very important part in the successful outcome of the negotiations in Europe in December. We continue to invest energy and time in CCS and we are confident of a good outcome.

My Lords, does the Minister agree that there is a minimal chance of meeting the global targets for CO₂ emissions reductions unless carbon capture and storage is widely adopted within 20 years and that it will be in the economic interests of the UK and the EU to spearhead the development of this technology with far more urgency than seems to be happening at the moment?

My Lords, I agree with everything that the noble Lord said except for his last few words. The Government are not complacent; we fully understand the importance of CCS. We will do everything we can to ensure that the UK is the leader in this field to our great advantage and that of many other countries.

My Lords, I recognise the importance of carbon capture but, given the potential energy shortage in the next decade, will the Government commit to not stand in the way of new build coal power stations while we are waiting for CCS to become available?

My Lords, the noble Lord knows that an application is under consideration in Kingsnorth and that it would not be appropriate for me to comment. He is right to suggest that the electricity generating industry faces a stiff challenge in terms of sufficient supply over the next few years. He may be aware that a number of coal and oil plants may go out of commission over the next few years; we are very much alive to that. I can also report to the House that there is new energy production. EDF’s takeover of nuclear power stations in this country will also lead to investment in new nuclear processes.

My Lords, did the Government support the Peterhead project and, if so, how?

My Lords, I cannot respond to the noble Baroness on that, but I will certainly let her know.

My Lords, would it not be preferable if the Government made more effort in relation to carbon capture systems rather than spending a lot of money on wind generation? That provides power only when the wind blows whereas coal-fired stations and other kinds of power stations provide it when it is really necessary—in the winter, when the wind may not blow if it is very frosty.

My Lords, I do not agree with the noble Lord on that; we should look at all sources of supply. We are pledged to increase the amount of renewable energy that we use in this country but CCS is also very important. It is important that we have diversity of supply and that we redouble our efforts to ensure that we meet these very challenging targets on greenhouse gas emissions.