 Mwan×go Gor career Welcome everyone to the meeting of the Net Zero Energy and Transport Committee, which we are conducting remotely this week. We have apologies from Natalie Dawn and Collette Stevenson, which is once again attending the committee as substitute. At agenda item 1, we have consideration of whether to take agenda items 4 and 5 in private. Item 4 is consideration of the evidence heard on carbon capture & utilization in storage. Ichon 5 is consideration of the committee's work programme, and Ar ddechrau ddigon, four and five will be taken in private. Agenda item two is consideration of two negative instruments. The instruments are laid under the negative procedure, which means that their provisions will come into force unless the Parliament agrees a motion to annul them. No motions to annul have been laid. The first instrument that we are considering is environmental protection, single use plastic products Scotland regulations 2021. The committee has heard evidence from the Minister for Green Skills, Sturcular Economy and Biodiversity on this instrument on 30 November, and then heard evidence from stakeholders on 7 December. Do members have any comments on the instruments? If any member wishes to make a comment, please let me know using the online platform. There are no comments from members. I therefore invite the committee to agree that it does not wish to make any further recommendations in relation to this instrument. Are we agreed? We are agreed. I don't see any further comments. That will mean that that instrument has been disposed of by the committee. The second instrument that we are considering is the Scottish Roadworks commissioner in position of penalties amendment regulations 2021. Do members have any comments on the instrument? If any member wishes to make a comment, please let me know using the online platforms. I see that there are no comments. I therefore invite the committee to agree that it does not wish to make any further recommendations in relation to this instrument. Are we agreed? We are agreed. Thank you very much. The next item is an evidence session on carbon capture utilization and storage, or CCUS for short. We will hear from two panels of experts this morning. The purpose of this evidence session is to hear expert views on the extent to which CCUS has a role in achieving Scotland's net zero targets. I welcome our first panel, Eric Dahlhausen, director ocean valley limited, and Professor Stuart Hazeldine, professor of carbon capture and storage school of geosciences university of Edinburgh. Thank you for accepting our invitation. It is very kind of you to join the panel today. I understand that you both want to make short opening statements. Perhaps, Mr Dahlhausen, we can start with your opening statements, and you probably need to wait for a second before broadcasting turns on your microphone. I will pass over to you. Thank you. Thank you. I think that my microphone is working now. Yes. I am honored to be here. I am a physicist and a petroleum engineer and first worked on CCS during the billion pound UK Government CCS competition of 2012. It was in fact CCS that triggered my interest in climate change. This is about CCS hydrogen and net zero for me. The overall aim is rapid decarbonisation and then full decarbonisation. The top priorities are phase out fossil fuels and maximise renewables growth. Then we do energy use and wastage storage, electrify, drive model shifts and find a solution for the unavoidables. For unavoidable emissions, such as the manufacturer, CCS technology would be useful. Anywhere else, alternatives seem to be better. Many numbers will come up in these conversations, but without context numbers mean nothing. For example, today, fossil fuel-based hydrogen is cheaper than green hydrogen. Economics of blue hydrogen are based on it, but it is generally accepted that by 2030 already, green hydrogen will be cheaper and so investments running beyond this decade will be stranded. The cost of CCS in Sleipnir is presumed to be £43 per tonne about half of current estimates. However, $43 per tonne is the price point at which 50 per cent of all emissions globally can be removed economically, according to a recent work from Goldman Sachs. Another context example, it is easy to get the impression that CCS is widely proven. My own professional position is that it is not, and that is based on essential differences between long-term storage and using CO2 for enhanced oil recovery. The contents is essential. In fact, Professor Hazardine's helpful submission on the cluster indicates a context that CO2 availability seems to be the weak link for the CCS report at the moment. The strange solution to which is to produce extra emissions through new fossil and hydrogen installation. Wasn't the aim for reducing emissions? The transition is urgent and best driven by the new energies, not the old ones. Coal companies didn't supply jobs when they needed to close. That wasn't their business. Moving away from fossil fuels is neither the expertise nor the interest of oil and gas companies. CCS jobs are not green jobs, though CCS can deliver some oil jobs, but a just transition requires jobs outside the oil industry, outside CCS and blue hydrogen, and that is not the terrain of the oil industry. I realise that the problems can be complex, but in my view the path is clear. Thank you very much, Mr Dallhausen. Perhaps I can bring in Professor Hazardine to give his opening statement. Thank you. Thank you very much, convener. As I think we can have common ground between myself and Eric Dallhausen, Scotland is on a journey towards halting and decreasing its greenhouse gas emissions, changing the climate. Scotland has an ability to build and operate carbon capture and storage, as well as using natural means of mitigating and storing carbon dioxide, which is the primary greenhouse gas. We can also agree that that means becoming more efficient in energy, switching fuels from high carbon to lower carbon and then to near zero wind, wave, tide and solar, and also capturing emissions from all the other things that humans do, which emit greenhouse gases, whether that is agriculture, forestry, industrial, actions like plastics and petrochemicals, and of course cement and glass making in all those primary industries. That does involve building carbon capture and storage to capture and store all those different emissions. The attributes of carbon capture and storage, which commend it to this mission at the moment, are that we can decrease emissions extremely rapidly many millions of tonnes per year rather than waiting for natural processes and much slower. We can also store the carbon back underground where it came from very, very securely for timescales, which are very important timescales of tens of thousands of years, not just 10 years. We can recapture carbon, which is already emitted from biomass, such as trees or crops waste, and also from fermentation processes like brewing and whisky making. We can reduce the emissions of all those contaminants to atmosphere and obtain much cleaner air. Carbon capture and storage has been attempted to be developed in Scotland since 2005, the first project that became public. We are on our fourth attempt now. Each time a large-scale industrial project has been proposed, costed, and each time that has failed to be funded by the Westminster Treasury. That is where we are. The question is to examine why that on-pass has occurred and are there any ways around that on-pass, and that is what I will be pleased to try to help with this morning. Thank you very much, Professor Hazeldine. Those opening remarks were enormously helpful. We have heard some quite different outlooks in terms of the future role of the United States specifically and negative emissions technologies more widely. Professor Hazeldine, let me start with you and bring in Mr Dallhouse separately. Can you elaborate on your opening remarks and explain how significant CCUS could be in order to achieve Scotland's transition to net zero? What policy measures do you think the UK Government and the Scottish Government need to undertake to make it a central part of that journey to net zero? I will draw the attention of the committee to predictions made by the Committee on Climate Change, which is a UK-based committee but has a specific Scottish subgroup that reports specifically on Scotland. The role of the Committee on Climate Change is to understand emissions of carbon dioxide now and predict the pathways into the future, which may result in net zero emissions by 2050. That net zero change, which came about in 2019, has revolutionised and accelerated the interest and the strength of development in trying to reduce carbon emissions and also try to recapture carbon emissions, as I mentioned in my initial statement. It is clear that emissions of carbon dioxide and greenhouse gases can be reduced to maybe down to 80 per cent of present values by switching fuels and becoming more efficient, all of which can be very sensible economic measures and commercially profitable measures. We also need to do other activities such as recapturing carbon as well as capturing carbon. It is that which balances the residual emissions. Residual emissions from using fossil fuel fertilisers in agriculture and residual emissions from industrial activities are either really expensive or difficult or both to capture. That is why some negative emissions are needed. The Committee on Climate Change projects that both significant carbon capture needs to be under way by 2030 and negative emissions need to be under way by 2030 if we are going to be on a pathway to meet the Scottish target of 2045 net zero. That is why this particular few years we are in now is particularly important if that is going to be developed in time to meet the ambition by 2045 we need to start now because these are large-scale industrial projects. What needs to be done by UK Government and Scottish Government? Scottish Government has control over surface planning, has very little control over the large-scale finances needed, so it falls to UK Government to try and introduce policies such as a price on carbon through purchase of emission certificates, for example, which is in place in the UK now, which basically gradually means that the price of emitting carbon dioxide becomes more and more expensive, so the value of carbon capture and storage eventually becomes cheaper than emitting, so then there is an economic imperative. Secondly, the UK Government operates to make subsidies and financial support available for the first projects, and that is what we are seeing in these activities to decarbonise clusters of industrial activity around the UK. Five or six clusters are planning to decarbonise, and not only two at the moment being the east coast, east side and humberside, and in northwest England and Merseyside, only two of those have access to carbon capture and storage projected at the moment, and that is the debate around the ACORN project and CCS in Scotland. An alternative way of decarbonising is that a Government could just mandate that carbon dioxide should be recaptured by oil and gas companies, recaptured and stored by oil and gas companies. However, that is not policy at the moment, but we have to find a way of transitioning nationally from those initial subsidy-driven projects into fully commercially driven business as usual projects. That is maybe a later part for the discussion. We are probably at the moment discussing those first steps for the first projects because ACORN failed to gain access to those initial subsidies. That was a very helpful overview of a number of the relevant issues in this area. I think that it is fair to say that perhaps you do not see CCS as having such a central role in the transition to net zero, but do you think that it could still have a role in more carbon intense sectors as a means of helping those sectors to minimise their emissions? I will pass over to you. Absolutely. I come to CCS from a slightly different approach because what I have seen with CCS, and when I started working on CCS in 2012—that is the same on the later projects I worked on—and the conversations I had with ACORN about four years ago as well, I am really keen to see CCS operate because you cannot learn how it works until you have got it functioning. It would be really helpful to have CCS working in the end. Where I come from is by accident that the CCS projects have started and stopped and started and stopped, and I do not know the precise reason for it. It is extremely frustrating from a technical perspective because you stopped at the point where you would have begun to learn. From my understanding of CCS, there is a lot to learn, especially on the storage side. That means that the timeline for a CCS project—please let them start as soon as possible, but the timeline for a CCS project before you can use it for scaling up, before you understand what the risks and issues are, before you even know which aspects of the storage spaces are high risk or low risk for the long-term storage—that takes a long time. If you look at the total runtime, as I tried to clarify in my submission, the total runtime is a long time. This is not a geological way of looking at it. When you look at things from a geological perspective, you have already had all the stabilisation period in the past, and you look at the last million years, and that is all quite stable. What we are looking at with CCS is from an engineering perspective, where all the changes, all the upsets will happen in the first 10, 20, 50, 100 or 1000 years that will have an impact on the remaining residence time of this. My feeling is that CCS needs to start as soon as possible, but we need to really understand that it is not going to be functional and scalable for quite some time. That does not mean that we need to start with one location. I think that it is perfectly valid to start with multiple locations. There are enough differences in intentions. I tried to describe the huge difference between the approach in the Netherlands for using old gas fields and the approach in the UK, which seems to focus on tail line aquifers, which is a totally different principle for storage. I think that that requirement is, but where I think the focus is, which is also what Professor Hazelbyn suggests, is that 80 per cent is the easy change. This should not come at the risk of pushing back any progress made elsewhere. The big risk with CCS is that it is being tied into hydrogen, and that is visible in the two clusters that have been approved. That is visible in the Aberdeen cluster. Hydrogen gets tied in, which is the intentional creation of emissions for some other purpose, and that is the risk of CCS. Once you start, assuming CCS will work and be scalable, and therefore you tie in something else, which increases emissions but will be rescued by CCS, you hope, then you are playing a really dangerous game, and that is the side where I come from. Thank you very much, Mr Dahlhausen. You both touched on risks associated with CCS. I wonder if you could briefly touch on what you see as the key technical and financial risks involved in this technology, including environmental risks. I know that that could be a lengthy answer, but I wonder if you could be quite focused on your response in terms of what the key technical and environmental risks are. Mr Dahlhausen, I will ask you first, and then Professor Hazelbyn. The financial risks—a lot of the carbon capture—are processes that are relatively well understood. The financial risks have to do with supply and the amount of time that you can keep it busy, and that you can keep your process function. On the technical risks and the environmental risks—and I think that they are very closely related—that has to do with whether the CO2 stays where you put it. Of course, I am simplifying it a little bit, because it will not stay where you put it, because that is the intention. The intention is that it distributes itself, and if you put it into gas fields, then the CO2 will typically go towards the top of the gas field where the gas was, but it will also dissolve in the aquifer if there is an aquifer. As it dissolves in the aquifer, that will displace because dissolved CO2 in water is heavier than the water in the aquifer, so it will start very slowly mixing that aquifer. Some aquifers, for example, on some of the fields I have looked on, they flow. Part of the reason they flow is because of oil production and gas production elsewhere, but I do not know if there are other reasons why they flow, but that flow from historical production will continue. The changes of where the CO2 sits in these fields is going to be changing. The technical risk there is that every time you monitor, you can monitor remotely to some extent with seismic, which is oil field technology, which is not cheap, I have to say, and you would have to do over a period of years. Also, after you have stored the CO2, you would still need to be expending money or monitoring. It is anybody's guess whether you need to monitor for 10, 20, 30, 50 or 100 years. I think that that is the understanding. Then, of course, when you monitor and you see something that is not what you expected, can you remedy? Can you still change it afterwards? Those are really quite complex issues. I am aware of these issues from the nuclear industry, where they still have not been resolved, of course. The nuclear industry looks on a slightly larger timescale of an order of magnitude greater than this, but the principles are the same. You are looking at a really long-term future, but the technical risk is, will it stay down there and how and what are the risks? Because this timescale is so long and an engineering timescale, the data that we have on the response is all very short time. Thank you very much. Professor Heazelbyn, I would welcome your thoughts in this area as well. Thank you, convener. I will answer in a slightly different way. You asked me technical finance and environmental risk. The main technology issue is usually described as being the difficulty and expressed as cost of capture of the CO2, which is separation of pure CO2 from flue gas or from whichever source you are obtaining it from. That is usually about 80 per cent of the coal cost of carbon capture and storage, so that is the focus of many activities to try and reduce and decrease that cost. As Mr Dahlhausen has said, carbon capture is well established as a process or many different processes. There may be six or ten different processes for different purposes. The mission is to make that firstly reliable, secondly cheaper and thirdly to decrease any emissions from that to zero during the commercial processing. That, then, in a project needs to operate reliably and hand over its CO2 to the business who is running the transport and the storage through a pipeline. There is a handover risk, a business risk at that point. The competitions that the UK Government runs are always focused on these handover points because that is commercially difficult for companies to handle. That can be handled by contracting and effectively by underwriting from the UK Government. That is part of what the benefit of these early projects can be to discover how to handle these risks and how to make this work. The risk in the capture equipment and the capture setting can be handled by extension and by knowledge of effectively chemical industry and refinery industry processes. They are all engineering processes that are built and operated at the surface in an industrial setting. I think that you know how to do that. The transport and storage risks transport is usually considered to run through a pipeline. There are many pipelines running carbon dioxide undersea in Norway, on land in the United States, Canada and some parts of Turkey and Hungary in the European Union. Those risks are understandable. There are 30 or 40-year track recorders doing that. The track record of carbon dioxide pipelines, the safety of those, is better than oil and gas pipelines usually. It is a low risk. The storage, which many people focus on, I should say I am a geologist by background originally. That is my specialist topic, if you like. I think there is actually a very low risk in the storage. There is a lack of understanding and a lack of appreciation through into the perhaps general population. I will just describe that briefly to try and help in the sense that what we are talking about is injecting carbon dioxide as a pressurised liquid where carbon dioxide gas becomes a liquid under pressure, just like in a fire extinguisher, the carbon dioxide is a liquid. That is injected down a borehole into the tiny microscopic pore space underground in the sandstones, effectively very similar to where oil and gas came from. That can either be in a gas field or it can be in a sandstone filled with salty water, the so-called salt water aquifers, which have no environmental use for anything else for humans at the moment. That carbon dioxide spreads out and displaces and fills up the pore space. We have undertaken a lot of research on natural occurrences of that, because carbon dioxide is quite a common fluid globally. We have looked at natural carbon dioxide occurrences in the North Sea, where carbon dioxide has been resident for many tens of millions of years without leakage. We have looked at carbon dioxide leaking out actively along faults in Italy, where volcanic carbon dioxide has been leaking and documented since pre-Roman times. We have looked at carbon dioxide's natural storage and leakage in the United States, in the Colorado Plateau States of the United States. We can understand the geological processes that contain carbon dioxide and the geological processes that enable it to leak. We can quantify those. We can then look for places underground where we want to find analogies to those natural places. Our quantification of that is that we can come up with a statement that 98 per cent of the carbon dioxide will remain securely stored for 10,000 years if we have chosen the correct geological site, which is a site with no obvious leakage routes through faults and bore holes. If there are bore holes, those can be cemented before CO2 is injected. We can track carbon dioxide underground. The idea is that the carbon dioxide, just to give the committee an idea of the size scale, we inject carbon dioxide into a sandstone, and that spreads out to be roughly the area of an Edinburgh. If you looked at that on a map view, that is the size of a storage site that you are dealing with. Some of the storage sites offshore are areas that are the size of a Glasgow, for example. Those come in different size scales. The spacing between those sites offshore is at those tens of kilometres of spacing. Each site is different to each other. They have individual geological characteristics, but we can examine sites in the North Sea, both in the Irish Sea, the Central North Sea and the Southern North Sea, which have all retained carbon dioxide, as I said, safely and securely for many, many millions of years. We can survey that as Mr Dahlberg suggested. Seismic reflection, oil and gas technology can be converted to image and understand and locate the carbon dioxide and effectively give you many decades of warning if any misbehaviour is occurring of that carbon dioxide injected underground. I have described the alternative of injecting CO2 for safe and secure storage for tens of thousands of years. Of course, two alternatives are either to behave at the moment, emitting all of the carbon dioxide to atmosphere, which is the worst possible case, 100 per cent leakage, or the other radical alternative would be to stop producing oil and gas and fossil carbon overnight or effectively as soon as possible. That is very difficult to do in our terms of our industrial society. We are progressing towards finding different sources of clean energy, but stopping overnight is, of course, technically possible but very socially disruptive. Thank you both for those fascinating insights and for sharing your thoughts with the committee on the risks and the wider perspective on CCUS. Let me bring in other members for questioning. First of all, Fiona Hyslop, to be followed by Jackie Dunbar. Good morning and thank you very much for sending in very useful papers to the committee. Clearly, we have a climate emergency and we need to drive to net zero and I understand and if I come first to Eric Dolehouse, the biggest environmental risk potentially of carbon capture and storage is that it interferes or delays green developments or green hydrogen or indeed other forms of green renewables. In a least worse option, looking at the projects across the UK, what type of carbon capture and storage or indeed utilization do you think would be the best option if we were going to do it soon and get ahead with it as opposed to delays? So could I come to Eric Dolehouse and first on that and I'll ask a separate question of Stuart Hyslop in later. Thank you for that question. So which type of CCS application would be most relevant is the question if I can translate that. In my view, CCS is focused around unavoidable emissions and I think that there is quite some clarity on what are really unavoidable emissions, what are still maybe unavoidable emissions and what are unavoidable emissions and that would take away not necessarily the storage sites of the current areas but it would remove hydrogen from that equation because that type of fossil fuel hydrogen is not supportive of the decarbonisation. It is something that relies on CCS. It relies on additional volume storage space of CCS in order to store stuff that we can also acquire in a different way. So I think that that is a critical part of it. I don't think that the alternatives are either keep on emitting or stop overnight. I think the alternatives are to transition and the fact that we have wasted 30 years before we started transitioning, that was the time in which we could have done it really nice and lovely and slow and well considered now. I think we need to do that a little bit more dramatic. But focusing on unavoidable or practically currently unavoidable emissions is a valuable place to start but letting it drag in anything else that stimulates emissions is a very good idea. Thank you. If I could now come to Professor Struth Hazeldine, in your paper you were quite direct about the disadvantages to the ACON project of the base criteria. If we are to do carbon capture storage projects and we have to move ahead as quickly as possible, can I ask you about the base criteria and how it either advantages some sites but disadvantages the ACON site? Is it from what we have heard that focus on volume of CO2 that is the issue and the combination of different sites adding to volume and indeed that point about connection to emitters? Is that the crux of that as to why it did not go ahead in phase 1 and what would be needed to make sure that it definitely went ahead in phase 2? Thank you, Deputy convener. What I tried to explain in my paper submitted to the committee is that in running what is effectively a competition across the UK then department for energy base in Westminster create a set of criteria because that tries to make that fair for all bidders so the criteria published in base briefing paper and are weighted with percentages effectively for five exam questions and you've got different percentages for each exam question but effectively about 35% of that is for the amount of the tonnage and a further 25% is effectively on the cost per tonne and so if you're a project which has got a very large tonnage of CO2 to claim to be disposed of before 2030 then you win out on that tonnage marking on that metric. So around the UK as I've briefly mentioned there's about six different industrial areas and those have been moving towards making the bids which are input during 2021, those have all been moving towards making their bids during the past couple of years and one of those was Teeside being a large industrial area obviously around Teeside, in other words Humberside and during the course of the bidding process those two projects each were claiming they could produce and store about 10 million tonnes a year of carbon dioxide and that fitted well with the criteria but there seems there's an interesting step which I don't know the answer to between the expressions of interest into the UK Westminster government by the projects then those two went in as separate projects and by the time the awards came out those two came out as a joint project and so the joint project to me I can understand that adding 10 plus 10 is 20 so obviously you have a bigger size and that's how you win but the actual physical layout of the project is capturing some carbon dioxide at Teeside, capturing other carbon dioxide at Humberside which are not geographically the same at all and then building two different and separate pipelines to go from Teeside and from Humberside off to the different parts of the same geological storage site offshore effectively as I made my analogy one might be going to West Glasgow and another might be going to East Glasgow if we take that sort of size scale analogy so I'm intrigued that that's became viewed as one common project but I don't know how that was arrived at but that obviously gained a lot of marks and that also then moves to the second part of the scoring the other 25% which is the cost per ton of co2 shipped or moved let's say be careful with my language moved by building pipelines and so it's well established that if you have a large diameter pipeline with a lot of carbon dioxide running through it then the cost per ton of moving that pipeline is less than if you have a small pipeline with less co2 moving through it so that large tonnage also becomes an advantage for a project like that and that's where the acorn project does not produce so much carbon dioxide so quickly because we're starting the philosophy of the acorn project is actually rather different to start with existing carbon dioxide rather than building new sources as mr dollhausens correctly stated so to start with existing carbon dioxide to use and convert an existing pipeline which then makes that less cost and to go into an existing storage site which has been well evaluated during since about what was in the very first carbon capture competition in about 2007 so we've got a lot of background in Scotland for that and there are several independent analyses of the costs of doing this again I don't know what costs these bidders have put into bays that's commercial incompetence but I draw the committee's attention to a recent report by element energy for Scottish enterprise which was published a couple of weeks ago and that produces costs for the different storage sites around the UK that acorn might be 10 or 15 pounds a ton whereas the high net project in Merseyside might be 37 pounds a ton and the cost for the teeside east coast project might also be 15 pounds a ton so it's a bit strange to understand how the acorn project became bottom in all of these evaluations faced with those types of different costing and something else I want to just mention is that the acorn we talked about the different geologies around the UK what the UK government has chosen at the moment with the east coast project going into the endurance storage structure and the Merseyside high net project going into a Hamilton depleted oil field both those are actually geologically very very similar almost identical sandstones so we've we've failed as a country we're failing to test out the variability and failing to test out the security and performance of different types of geological storage and what acorn offers is access first access into a huge diversity of geological storage offshore east in the spots known as the central north sea effectively east of Aberdeen north east of Aberdeen so I think there's a with the UK government has maybe chosen on cost but has introduced a systemic risk which is not a sensible thing to do does that answer enough of your question deputy convener thanks very much that's extremely helpful I'm sure colleagues might want to follow up in some of these points but convener I'm very conscious of time but I think from this it's quite clear that the days criteria are highly questionable from both the financial and environmental points of view from what we've heard but I'm happy to pass back to the convener now some conscious other members have lots of questions thank you very much Fiona let me bring in Jackie Dunbar to be followed by Liam Kerr with the supplemental in this area Jackie over to you thank you convener and can I thank the gentlemen for coming along to the committee today I mean it's already been touched on regarding the decision of putting the Scottish cluster onto the reserve list so can I ask what do you think the impact will be to our emissions reduction targets following that decision do you want me to to ask Professor Hazel Dean first please okay so my perception of this is that the non availability of a carbon capture and storage takeaway route if you like is really fundamentally detrimental and serious and prevents for Scotland because it prevents Scotland enacting co2 capture and storage and it prevents Scotland from enacting these negative emissions these recapture emissions and storage which I talked about briefly earlier on and so those both need to be in operation by 2030 there's a five-year lead time on building a project like this so deciding now on how we're going to handle this is fundamental to Scotland being able to meet or Scotland failing on its 2045 net zero target and so that's why this is a serious business in terms of industrial and environmental planning and infrastructure provision for the future and I think Mr Dollhausen has also spoken about testing different types of geological storage and different types of operation and I think that's a material consideration and so this is why we need to understand how to move acorn forward and so the status of a reserve bidder at the moment as far as I can understand from the base publications the official base documents and also by conversation with people intimately involved with the project then there is no advantage in being involved as a reserve bidder it just means you have to go to a lot of meetings but there's very little chance of one of the other bidders being declared void so you're effectively being asked to run on the spot with very little or no funding and prevents you from generating other opportunities in the meantime if you focus on that and I think if for a company like INEOS as well who you've got in the second panel that places them in a really difficult position because they have to decide if they're going to direct their DO2 down towards T side which should be relatively expensive because there's no easy route from Grangemouth to T side or do they wait and hang on and hope for the best that a track 2 a subsequent wave of projects in a subsequent wave of projects the acorn project will win out and of course we don't know the rules for a track 2 project so we have no way of telling if acorn rebidding will win out or not because I am very sure that there will be at least two more bidders for carbon capture and storage projects from England in that wave to that track 2 set of projects so depending on the criteria we're just gambling again. Thank you Mr Dalhousen would you like to say what you think the impact will be? I'll just keep it really short because I'm not as familiar with the matters as Professor Hazardy of the political specifics but what I assume is that the effect and carbon storage of any project that starts or that continues now will not be felt for another 10 or 15 years perhaps not at any relevant scale and therefore I imagine that the impact is not going to be tremendous but I assume there will be an impact because even during a learning process you can still store some CO2. Having said that I don't think it's a sustainable way of achieving or hitting the net zero target, does that help any? Thank you. If I can just go back to Professor Hazardy quickly. Can I ask you what you think can be done at St Fergus in the Scottish cluster to evolve and adapt in the short to medium term to make sure that of on-going investment to secure the jobs? Thank you Mr Dunbar. There are several things that the Scottish cluster can try to influence. Firstly, we need to understand what the rules for track 2 competitions might be and in particular we need to understand if transporting CO2 by shipping will be allowed because that was specifically excluded in the track 1 projects and the Peterhead deep water port is very well set up for importing carbon dioxide shipping in effectively small tankers from the coastal locations of the UK, whether that's around the London southeast of England area, whether that's Southampton, whether that's South Wales and that can be a profitable business which then helps those other parts of the UK to decarbonise by transporting their CO2 to a geological storage site beneath Scottish waters. Secondly, the UK needs to try and keep the carbon price high so the UK has a carbon emissions scheme rather like the European trading scheme is still is where big industrial emitters need to purchase permission to emit a ton of CO2. Price for that with the move to net zero, the price for that has moved up from £20 a ton now to about £70 or £80 a ton in the past year and that's really important because the price of emitting then starts to become very close to the price of carbon capturing, transport and storing and obviously storing is much better environmentally than emitting so the financial difficulty starts to go away. That's in the UK's gift to try and keep that carbon price high and that will encourage decarbonisation of industries all around the UK so it's but it's a sensible backdrop to do that and then the other type of feature which Acorn project could consider is basically asking or bidding for not financial support from the UK but to say we want to run Acorn as a market driven model to create a business in CO2 storage because we know that around the North Sea and the Baltic the Norwegian project on CCS to acquire CCS commercially, acquire carbon dioxide commercially from other emitters in different countries take that to Norway and store that for a fee, that highly priced CO2 takeaway and disposal service was oversubscribed by a factor of about 10. There's clearly a huge unmet market for taking away transporting and disposing of carbon dioxide and it's possible that Acorn could choose to bid in to that market and it could do that commercially but it needs to be underwritten by a commercial licence from the UK base department which overall takes responsibility for monitoring, regulating and eventually takes ownership of that carbon dioxide and just and that's the same for all the other projects of course as well, the projects which are related to go ahead but what we're saying there is Acorn could try to go ahead as a commercial operation with that economic underwriting permission from base and would only need a very small subsidy for capital expenditure to build the cost of the equipment and would not need the huge running cost of operating expenditure with the other projects aimed to take from the UK taxpayers. How does that help? Yes, thank you very much. It was very, very helpful. I thought that that's all I have at this present moment, so I'll hand it back over to you. Thank you. Thanks very much, Jackie. Let me bring in Liam Kerr, who has a supplemental in this area to be followed by Mark Ruskell. Liam, over to you. Very grateful, convener. It is a very brief supplemental from something arising from the remarks that we just heard. Mr Hazeldine, just to be absolutely clear on something, can you just confirm for me that the criteria, the selection criteria, were all known about and set out very clearly in advance and that all the interested parties for these programmes pitched against those criteria and the scores were allocated against those criteria? Can you just make sure that I'm clear on that, please? That is the basic factual statement. That's correct. The criteria are published in advance and the different subsections in the criteria were published. That's why I guess that the T side project and the Humber side project could calculate that by creating a form of merger, that would advantage them in those criteria. Of course, as with any criteria, there is a huge amount of expert judgment involved in how you apply those criteria. If any of us have ever bid in for commercial-type projects, then we can understand that the criteria is sometimes written down but a little difficult to understand. So there's a lot of latitude in the interpretation and the credibility factors which Bayes and its advisers will put on to those different criteria. There's something to unearth perhaps about how different actors perceive those. No further questions from me, convener, at this stage. Thank you very much, Liam. Let me bring in Mark Ruskell to be followed by Monica Lennon. Mark, over to you. Thanks, convener, and morning to you both. Thanks for joining us this morning. I wanted to ask you a critical question, which is around how do we deploy DCS in a way that does not build in dependency on fossil fuels? We have already had some comments, Mr Dark, using about fossil hydrogen production. May I suppose be related to that and on-going dependence on natural gas if we are to use that for domestic heating? Where do we draw the line? Is it possible to focus in on those harder bait sectors like cement without bringing in to enhanced oil recovery or fossil hydrogen production within the economics of CCS? Can I start with Professor Hazeldine on that one? Firstly, I just want to disentangle the enhanced oil recovery piece in that the various processes of carbon capture are well-established, how to separate CO2 from other gases. The use of that same carbon dioxide for enhanced oil recovery is really a business and market decision that, in the United States, companies can sell that carbon dioxide for enhanced oil recovery, and a company doing that will buy the carbon dioxide, so they get a better price for that and they do not get a very high price or storing carbon dioxide, so that is a purely separate commercial decision. What we are trying to do in the UK is effectively put a high carbon price in the background, as I described earlier, so that the price of emitting becomes more expensive than the price of storing. That drives that market in storage, creates that market to enforce and enhance and encourage storage and not encourage enhanced oil recovery. We need to be a bit cautious about coupling all those together, so they are sub-fundamentally different. How do we ensure that we do not just carry on producing fossil fuels? I am going to be slightly contentious with you and say that I think that some fossil fuel use and production will continue, because it is phenomenally useful as a very high density and portable storage of energy. If you have an aeroplane, for example, like it or not, then transporting fuel energy as kerosene is much easier than transporting that as hydrogen or as batteries. We know that we can produce electric planes, we know that we can produce hydrogen planes, but they do not go as far, because they cannot carry enough energy in them. We need to offset that, and that can be done by capturing CO2 from biomass. As I mentioned, from fermentation processes, there are 3.5 million tonnes a year of bio-CO2. We are just venting in Scotland. We should be trying to capture that at relatively low cost and put that back underground as a negative emission. We can also drive up the price of using fossil fuel and reduce and decrease the price of providing renewable energies. At the moment, the abundance of renewable electricity is good to supply most of our basic electricity needs on average throughout the year. However, if we add in the heat, we use six times as much heat as electricity in the winter, meeting that demand change and that extra amount of energy for the winter, means that we would have to multiply our renewable electricity by something like a factor of 3 or 4 plus storing energy. That is a long way off yet. When I say a long way, I mean 20, 30 or 40 years, where we are busy and engaged in building maybe 10 gigawatts more of electricity with windmills around Scotland, and that is still well short of what we need to supply our energy needs in the winter. That is why I think that the use of gas or gas converted to hydrogen is going to have a longer future than many environmental activists would prefer. That is why I think that CCS has a role in being a very rapid and very large scale way of reducing emissions, but eventually you have to try and price out or regulate out the use of fossil fuels progressively as these alternative methods of mitigation have been brought in. Can I ask you those specifically about the use of blue hydrogen? It seems that the ACORN project is economically dependent on the production of blue hydrogen. If we are putting 20 per cent of blue hydrogen into the gas grid, we may not get a carbon saving on that, although the figures about blue hydrogen production are questionable. What about the 80 per cent? What about the natural gas that will be continuing to be dependent on to run that particular type of national grid that is required for that heating system? Does that not build independence on on-a-dated natural gas? So we are dependent on natural gas right now for practically all of our heating in our homes and our industries, and of course dependent on natural gas for a very large part of our electricity production still. Although we in Scotland can calculate that on average 100 per cent our electricity is from wind power, that is not the case for the rest of the UK. We are dependent on methane gas and the shift into hydrogen is trying to say, do we decarbonise the use of methane gas at the point of use, like in your house, my house or an industry such as in the Ineos range mouth complex, or do we try and decarbonise that methane gas where it arrives at source upstream? That is what the process of making hydrogen at St. Fergus would be with the ACORM project by using not a steam methane reformer but an autothermal methane reformer, a slightly different chemical process which keeps the CO2 inside the process and is actually a more efficient and effective process, which, according to the developers, can capture 99 per cent of the carbon dioxide produced in that process. So again, I think we need to go quite detail specifics on that blue hydrogen route. That blue hydrogen route in the UK will be bringing CO2 on to the shore from pipelines from the Scottish part of the North Sea or the Norwegian parts of the North Sea, where there is very little minimal leakage of methane from that production and from those pipelines, very little embedded energy in moving that methane, and then if we can convert that methane very effectively to hydrogen at the point of entry and send the CO2 offshore, that is a very neat industrial way of trying to minimise those emissions. Of course, that 2 per cent, then 20 per cent will eventually, as anticipated, move up towards 100 per cent of hydrogen in the gas system, but that will mean, of course, processing more and more methane to make more and more hydrogen. But until we can match, until or when, or if we can match that energy, in that chemical energy of methane or hydrogen, until we can match that with renewable electricity production, then that is our option. If you can't go straight to electrifying everything right now, even if you wanted to, because we don't have the amount of electricity for the winter months, has that helped to go? It helps a little bit. Ask me another question. The question about the 80 per cent of natural gas that you still need to use in the gas grid to blend that at the moment. Can I bring Mr Dahl who's in any way just for another short with a different perspective on things? Yes, thank you, because I have a very different view on this matter. Even though, yes, the Scottish heating costs in winter are quite large compared to the electricity supply, there is also something called the heat pump, which you will be well familiar with, which multiplies the efficiency of electricity by factors 3 to 5, depending on how you can do it. If you want to stay closer to the multiplier of 5, then it takes only a very small amount of, for example, geothermal energy or other solutions to get to that point. Without stepping into the explicit discussion on how quickly we can build renewables, that is not the issue. The change to hydrogen in itself carries a efficiency penalty. Just like CCS carries an efficiency penalty, to inject the gas underground costs an additional 20 to 25 per cent of energy compared to the amount that you produce. You have to take the whole picture into account. I think that it is too easy to say that we will never do that in time, so let's do something else that emits. Suggesting that we will replace 20 per cent of the gas system with hydrogen, that has very little impact. There are recent studies that have been widely commented on illustrating the amount of upstream emissions from natural gas. The upstream emissions in methane and CO2 cannot be controlled to the extent that they disappear. The work that has been done by Howard Jacobson from Cornell and Stanford, they used real life data from certain areas, in fact they did a global average, where a large percentage of methane is lost in the production of natural gas. While Professor Hazardine suggests that we can do it better and we don't spill as much gas during our production process, the UK is a natural gas importer, so it's easy to say that we will use our relatively clean gas to turn it into hydrogen, but that means that we will need to import more natural gas from elsewhere, where the leakage rates in there for the methane spillage is higher. Just for comparison, the Jacobson paper came to the conclusion that CCS, because of the additional energy requirement, if you use natural gas for that, was less efficient than burning the natural gas in the first place, rather than converting it into hydrogen. So there's a lot of energy balance, there's a lot of context going on there. It's very difficult to say, okay, well this is the answer. I have confidence that renewables can be built in time, as far as I'm aware of the CCC, but definitely the IEA and the various other groups. If you can do that and you need hydrogen to make life easy for certain areas, then green hydrogen is a far better way, a zero emissions way to bring that down. Since green hydrogen is the long-term targets anyway, both for the CCC and for the IEA and for all models, assume that green hydrogen will need to rule out grey or blue hydrogen. Scotland being one of the two highest potential green hydrogen producers, I see no reason to not go there straight away and to take this interim step, increase natural gas production, increase the emissions that go with it, increase the embedding of the oil industry further in the energy system, where it's been incredibly difficult to get rid of it in first place for the last 30 years, so I think the risk of taking that path is extremely high from a lot of factors. Okay, thanks both for that. Can I just ask it a further follow-up question? There has been discussion within the Government's climate change plan about deploying CCS technology on waste incineration energy from waste plants, of which there are numerous around Scotland in different locations. Can you comment on the economics of retrofitting existing plants and whether CCS could be deployed effectively at that scale for future energy from waste waste incineration plants? Can I go back to Professor Hazeldine on that one? I think that's a really good question because a lot of the waste that we're combusting in energy from waste is bio-waste, organic waste, and so if the CO2 is captured from that, that can form another route to negative emissions by capturing CO2 from the air, the atmosphere with normal biological organic processes and then burning that waste and putting the CO2 underground. It's a huge disappointment and I think a huge planning error systematically that the UK as a country has not, has failed to take any advantage on the energy from waste plants either in supplying heat to district heating or in trying to capture the carbon dioxide from those plants. If those plants are running at about a size of 20 or 40 megawatts, which some of them are, then yes, it should be commercially feasible to capture the carbon dioxide using existing known CCS-carbon capture technology. It should be feasible to capture the carbon dioxide from those plants, but because planning by various local authorities has often located those in the far-flung regions of their local authority, it's going to be very difficult to move the carbon dioxide away to a storage location and so if that would need a little bit more work, but I think you're basically going to be looking at trucking CO2 to a railhead or to railway wagons or trucking CO2 to a pipeline terminal where you can put that into the main artery of CO2 disposal from Grangemouth to St. Fergus, and so I'd be very keen indeed to see those included in our environmental low-carbon ambition. I just want to come back a little bit on Mr Dahlhausen's statement that mentioned the paper by Jacobson and Howarth, and that's a notorious article in the academic community at the moment because it's really quite deliberately taken very pessimistic assumptions for the leakage of methane through our pipeline system. Some of that's justified in the United States, for example, but here in Europe and particularly the UK and Norway, we have much better measurements and we can be much more secure that we're not leaking anything like that quantity of methane so that the development of blue hydrogen is much lower emissions than mentioned. What I think is the elephant in the room there is that the UK will be importing more and more methane from liquefied natural gas shipping, and that has a huge embedded emission in the compression and cooling of that gas. We want to get out of that bind as much as possible. As I think was briefly mentioned, one way out of that is to make our housing and our buildings much more efficient in terms of insulation and energy use, and that's the way we escape. That's all, thank you. I know time is getting on. I don't know if Mr Dahlhausen wants to come back on any of those points or in relation to waste incinerators. Just quickly, I appreciate the time. In principle, the waste incineration, and I agree with Professor Hazelbyn, the risk involved in it is that waste incineration is also where single-use plastics end up and single-use plastics, of course, are hydrocarbon sourced, at least most of the carbon in single-use plastics, is hydrocarbon sourced. Using the waste incineration and moving that to CCS is the way I look at it, probably going to be a tool for plastic manufacturing to say, okay, single-use plastics is not a problem as long as we throw it away afterwards, because it will all end up stored. Then, of course, you would continue the cycle of fossil fuels to CCS. Even though waste incineration per se is a really relevant option, we need to watch out that it doesn't get used as a tool just like CCS is used as a tool for hydrogen, that it gets used as a tool for single-use plastics, which is the second growth area of the fossil fuel companies. The other thing is about the related emissions, and that depends very much on your capture process. A lot of the capture processes that I'm familiar with or the capture and transport and injection processes need quite pure CO2. What that means is that all the additional emissions, including NOHs, but also toxins of all sorts, will remain going to the atmosphere. Therefore, the health impacts of extracting the CO2 only and not removing all the emissions will remain the same. The health benefits of removing the emissions are effectively going to disappear just by doing that. The third point is the pessimistic assumptions based on the USA. Yes, that's a fair point. They have taken actual measurements. They have made a very clear discussion of what would happen if you would change these parameters. I have a lot more confidence in the report that's based on actual measurements than what the Committee for Climate Change, for instance, stated in their response, which is taking the vendor promises of efficiency of CO2 extraction and using that as a fact. That is where the 99 per cent lab scale efficiency of extracting CO2 from flue gas might be achieved at some point, but very rarely does industrial scale anything achieve the efficiency of lab scale. Mark Ruskell Let me bring in next Monica Lennon to be followed by Collette Stevenson. If I could just highlight to the panel and members, we are very tight on timing, so if we could keep questions very focused. If I could ask the panel, I fully appreciate that this is a very technical and indeed fascinating area, but if answers could be a bit briefer, that would mean that I can bring in all members. Monica Lennon Thank you, convener. Good morning to our witnesses. Some of the biggest supporters of carbon capture utilisation and storage also support the development of new oil fields such as Campbell and maximising the economic recovery of oil and gas. How would you respond to concerns from people who feel that relying on the fossil fuel industry for carbon management will delay the just transition away from fossil fuels? If I can come to Stuart Carson and Eric, please. Stuart Carson Thank you, Monica. Again, I think that that is a really fair question. If we are to engage in carbon capture and storage, then, like it or not, the oil industry has the skills and technology to put carbon dioxide on the ground and understand where that is underground. If we are going to do it, some derivative of the oil and gas industry is likely to be involved. I think that in your next panel you will be talking to Alan James, who came out of the oil and gas industry but is very engaged in trying to dispose of carbon dioxide, but that is a good example of how people can use these skills to a different purpose. Can CCS be used to justify new oil fields? I think that we have to be very careful here first. Obviously, the cambo is a good example currently of what is going on. If we reject a cambo as Shell have decided to pull out of cambo at the moment, does that set the North Sea on an irrevocable and inevitable decline? That could be one way of doing it. It depends on the politics of what politicians want to decide. If the North Sea declines rapidly, it is not clear that those jobs in a just transition will have renewable jobs waiting for those people. We have to measure the pace of decline in the North Sea and try to mix that with the rate of increase of renewables, which, of course, could be accelerated. An alternative is that the environmental test, which the Oil and Gas Authority, as the grantor of licences, has to place an environmental test on any new development, but it is not at all clear what that environmental test is. From my point of view, that environmental test could and should be that no carbon is emitted from the net overall hydrocarbon produced. With a cambo type of development, a developer would have to be bound and mandated and forced to store the equivalent amount of carbon dioxide, so there was no net emission. That would be the true environmental test that you could continue to extract oil as long as you made sure there were no additional emissions. That, again, is up to Parliament and politicians to try and regulate and impose the legal mandate on that. That is it. I think that there is a huge risk, and I think that there is no coincidence that they are tied together. The purpose of CCS, the way that I see it, is the way that the oil industry has refused to self-fund the study, even though they knew what was coming. Every time something was stopped by the Government funding, the oil industry did not continue other than by lobbying. I think that's a huge risk. I'm convinced that the whole CCS push is driven by natural gas growth, and that's supported by the fact that the large oil companies, and that includes Equinoir and Shell and BP, all have a gas growth strategy for which there is no energy balance reason. The only reason is that, if you push blue hydrogen, you can sell more gas. If you push CCS and you power the CCS with natural gas, then you can produce more gas. If you power CCS with renewables, then you take away from the renewables budget, which is necessary to remove fossil fuels. There is a huge risk. I mentioned that with the single-use plastics and hydrogen. CCS must be removed from the oil industry. Even though the knowledge is in the people who are working in the oil industry, the CCS knowledge is not specific to any oil company. I think that there needs to be a very clear separation between that. MER is the support of Campbell. None of that has any consideration for the climate crisis, or for the just transition. For that matter, because the just transition is another aspect that has been hijacked in my feeling by the same drivers of CCS, calling CCS jobs, green jobs—where are they not? They are oil industry transition or decline jobs. None of that is green, so I think that the risk is huge. My final question will come back to Stuart on this one. In your review, if carbon capture utilisation storage does not go ahead in Scotland at the scale that we have discussed today, what will that mean for Scotland's journey to net zero? What will that mean for jobs in Scotland, and what will that mean for our obligations and response to the climate emergency? The simple understanding in terms of reaction at the moment is that, with no CCS, the projected pathway that Scotland is proceeding on—the pathway laid out from the Climate Change Committee—cannot be achieved because we cannot reduce our emissions by capture of CO2 and neither can we undertake negative emissions to capture CO2 from the air or from biomass and plants and fermentation and put that underground, so the 2045 net zero ambition disappears. If, in terms of jobs, CCS projects in Scotland have calculated that that would add something like 2 or 3 per cent of gross domestic product to Scotland, so that is a huge value across all of Scotland. Obviously, the direct jobs are on the eastern seaboard of Scotland, and those CCS jobs have been calculated at maybe 10, 20, 25,000 jobs directly related to that. There is a huge supply chain that could be involved in CCS projects in Scotland and in the UK. This is a serious consequence. There may be a way through this, but, at the moment, talking about that with the Committee on Climate Change last week, we cannot think of a way out of that at the moment. The way out of that may be much more assertive action on making housing more efficient, decreasing energy use, making energy use more efficient, but that entails much bigger social change and social acceptance. We know that that has taken 30, 40 or 50 years so far. We know exactly what to do to make houses much more energy efficient, but we have failed to land that positively with many of the public. How to do that in the timescale remains an unanswered question. I hope that that helps. I know that we are running out of time, so if I can come to Eric briefly to respond to the question and perhaps respond to any of the points that Stuart has made, thank you. Yes, just very quickly. First of all, there are many routes to achieve net zero for Scotland, and the parameters that you put into it decide what you get out of it. If you put CCS and hydrogen into this route, you build it around, but there are other ways of building the routes to net zero in Scotland without CCS. Regarding the jobs, taking jobs out of context is something that every organisation has done for as long as I've been alive. Allocating jobs to something like this and saying that adds to the GDP is a bit of an illogical approach, because anything that will come instead of CCS will also carry jobs, and if that relates to renewables and renewable technology and any other ways of using, for example, green hydrogen, then that has been illustrated to actually create more jobs than these old technologies, so I don't think that should be a consideration at all. Those numbers are replaceable. Thanks very much, Monica. Let me bring in Collette Stevenson and then finally Liam Kerr and just a reminder to everyone that we are extremely tight for timing. Collette, please. Thanks, convener, and good morning both to Stuart and Eric. Thanks very much. It's been absolutely interesting hearing from you both. I just wanted to clarify on one point earlier, and it was in relation to the methodology in terms of the criteria. Can I just clarify with Stuart in terms of things like storage capacity and the ability to take commissions? Was that actually included in the criteria when the methodology was carried out? The methodology wasn't specific, far as I'm aware, on the total tonnage of storage available. You just have to be able to provide storage for the amount of CO2 in your project, so there's no strategic insight in the criteria, if perhaps that's what you're asking. So, for example, if the insurance structure from the east coast could take 400 million tonnes of CO2, then that's maybe, but if the project only requires to use 100 or 200 million tonnes of CO2 storage, that's all they need to be certain of. That's my answer, short answer. Okay, so I'll come back to that on my main points, and it's in relation to more like finance and investment really. Can you just clarify for me, you mentioned earlier in your opening statement about the role of the Treasury with base? Can I ask you to flesh that out a wee bit more in terms of what was the role and in terms of what role do you envisage the Treasury having in the next in the reserve status really for the carbon capture? By the underpinning money from an allowance that they've projected, and so there's this famous billion pounds of capital allowance, but the money is actually in multiple types of money. Everybody focuses on the capital billion pounds to build a couple of CCS projects, but the real big money is possibly three times that amount, which is the running costs of the CCS projects on the east coast or the west coast. The Treasury obviously calculates all that as the total cost of the projects, and we know that base Department of Energy submitted three projects to the Treasury, and only two were approved. We know that Acorn passed the criteria, but for some reason the Treasury decided that they wouldn't fund that Acorn project, and that seems—again, I obviously have a clear interest in that. I'm resident in Scotland, but to me the Acorn project seems low risk, lower potential cost, incremental cost, so it's a much more manageable approach, but that's for the Treasury to decide. I can't remember the rest of your question now, sorry, Collette. I don't know if Eric wants to come in on that, if he's got any knowledge on that either. No, I have very little knowledge of how the distribution and how the funding runs, I'm usually on the receiving end of the time. Thank you. So quickly can I just come in? I know time is very tight here, but what really more can be done to ensure that the Scottish cluster goes ahead in phase 2? What can be improved, and in what ways did the Scottish PID not have that advantage? Should it be touched upon how it couldn't proceed and whatnot as well? I think that as well, within Stewart's paper, I'm jumping here, sorry, was about commencing without the base support, really, if you want to touch upon that. Briefly, please, because we're running out of time. Thank you. I know, thank you, sorry for that. So I touched upon this briefly in an earlier answer, in that we can choose either to go in with the track 2 competition of the base, which run, we don't know what the rules are yet, but the track 1 competition rules significantly disadvantaged the ACORN project in being very focused around the total large tonnage of CO2 and in disallowing shipping to bring in CO2. So if we wanted to advantage ACORN, we would be engaged in trying to lobby for the rules to be slightly different, to include shipping of CO2 specifically so that ACORN can bring in a larger tonnage of CO2 and thereby increase the total tonnage to be restored and decrease the cost per tonnage of CO2. Eric, would you like to comment on that? I'm sorry, Stewart. I'll just wind them back there. Sorry, I was just going to go on to... Am I live on screen? Yeah, sorry. Yeah, okay. You asked me about the other... I briefly mentioned the other route, which should be just going as a provider of CO2 storage, as a business, because we also know, as well as cleaning up CO2 emissions from the UK, we can help with CCS to clean up emissions from Europe. And if we can import CO2 by shipping from states and countries of Denmark, Germany, France, Netherlands or around the North Sea, Finland, around the Baltic, then that can be brought into Scotland. We can charge money for that. We can make money for that by providing safe and secure storage. But what we do need in that is not just to invent our own business, but we need the Department of Energy, Bays, to provide that economic licence to take on the regulatory provision and the underwriting, long-term liability and ownership of CO2 in the infinite future. That's it. Okay, thank you. Just quickly, my main concern is in CCS creating continuation of fossil fuel usage, where it shouldn't... it isn't necessary and where it shouldn't be. So even though I support the principle of finding CCS and finding a way in which it works, and I support that shipping in could well be a logical way of doing it, because of the risks of the store, having a limited number of well-controlled stores could well be a better outcome than having lots of small distributed stores in different places. Okay, thanks. I've got no further questions. I'll pass it over to the convener. Thank you, colleagues. Finally, Liam Kerr, please. Thank you, convener. I'll be as brief as possible with two direct questions to Eric Dahlheisen, please. First of all, Eric, Oil and Gas UK's energy transition outlook reports a total capacity to hold 78 billion tonnes of CO2 under the north and Irish steves. As I understand it, that's about 190 times greater than the UK's annual emissions of 400 million tonnes. Even if we were to accept all the concerns that you've raised today, given those figures, is CCS not something we ought to be not only exploring but ramping up rather than holding back on? I come back to my introduction about the context of the numbers. The 78 billion tonnes is a first-pass estimate of where geological storage could be available. Having worked on two earlier projects, one which turned out not to be feasible because of the absence of a secure store, which that project from 2012 is still in those 78 billion in that volume. When I stated in my submission that whether this number, which is the total geological store, whether one in 10 of those actual storage spaces would be viable or whether maybe one in a thousand of those storage spaces would be viable, that you will not know until you do the detailed investigation, which is now happening on Acorn, while Acorn has been working on it for some time, and then by finding out whether it responds to how it works. The 78 billion tonnes of capacity, and I don't think they use the word capacity, but there is a different way of calling it, is not the amount of CO2 that you can store. That is the long and short of it. I am going to focus on figures again, because that is what we have got to work with, it seems to me. We have spoken a lot through this session about hydrogen and your concern about creating fossil fuels. I was looking at this this morning. The international energy agency has modeled various scenarios in which they anticipate that hydrogen will meet 10 per cent of global energy consumption by 2050. They seem to suggest that 40 per cent of that hydrogen will come from natural gas facilities that are equipped with CCUS, i.e., blue hydrogen. If that is right, does that not suggest that this technology must proceed in order to ensure that we get to the hydrogen economy that most of us would be looking to get to it? First of all, the IEA scenario is a scenario, and a lot of the scenarios that are around about 80 per cent of the scenarios use carbon storage in order to arrive at net zero, not all of them, but 80 per cent of them do. Once you set the parameters of a model, then you will use those. Once the IEA decides, and let's be clear about the background of the IEA, the IEA is the historical, the oil industry, the lobbying group, or technical support groups, however you call it. When you assume that CCS will be viable and you assume that you can produce blue hydrogen with reduced emissions, as in with substantially reduced emissions, if you assume that the methane leakage upstream is relatively little value, then yes, that's how a model is built, but these models are only that. They are models based on input, and you can build it in any way you like. For Scotland specifically, Scotland is one of the two highest, together with Norway, the two highest net producers of green hydrogen. If you want to produce dirty hydrogen, as I call it, then maybe Scotland is not the ideal place. If you want to store CCS from elsewhere, from unabated residual emissions, then perhaps it's not a bad idea. So, from cement production importing it by ship into CCS, and then working on finding out whether you can make it stay there, because that is a huge uncertainty, I think is a valid approach. But to now aim for moving up your gas emissions and your source emissions in order to achieve this, I think is a bias towards certain inputs, if that makes sense. So, I think that that model and a lot of these models are biased towards the assumption, which is the result of very hard lobbying from the global CCS Thank you very much, Liam. That brings us to the end of this session. Professor Hazeldine and Mr Dollhouse, thank you very much for joining and sharing your fascinating and expert insight into this area. I will now briefly suspend this meeting to allow for a change of panel. Welcome back everyone to the second panel that we have this morning. I welcome our guests for this second panel, Colin Pritchard, energy business manager, Ineos, Alan James, chief technology officer, Storega, Mike Tholan, director of sustainability, oil and gas UK. Welcome to you all, thank you for joining us today. Sorry, we're running slightly behind schedule. I also put on record that Serene Wood was invited to the panel. He unfortunately could not attend, but he provided a very helpful written submission, which has been published as part of the committee papers, and we thank him for his written submission. We will now move on to questions to our panel members. Let me start the first question, which is a general question in relation to how important CCUS will be in order to achieve Scotland's transition to net zero. Can I ask each panel member that that's an introductory question in terms of order? Perhaps we can start with Mike to be followed by Colin and then Alan. Mike, over to you, thank you. Your question covers three main aspects in terms of importance to the Scottish economy. Firstly, as you heard from the speakers in the last session, CCUS is part of the mechanism of decarbonising the UK and indeed the Scottish economy. Without it, it would be much harder, if not impossible, to get to net zero in Scotland's case by 2045. It allows us to address those industries that are hard to decarbonise while we find solutions for them and capture that carbon in a way that allows us to get ahead of that net zero again, without which we would damage Scotland's economy in a pretty dismal way. First of all, it can help Scotland to decarbonise like nothing else. Secondly, it allows the supply chain, which is a huge asset to Scotland built on its naughty heritage, to learn the technique, the technology at home and help build its competency in a way that allows it to transfer those skills abroad based on that knowledge in Scotland. A great advantage to Scotland both in decarbonising and in the skills. On top of that, it allows us to get ahead of understanding the border game of helping Europe to decarbonise as well, which is part of how it changes its global problem. It is not just one for Scotland or the UK, so we are bringing bigger solutions to the market. Thank you very much, Mike. I will send a question to Colin. Can we arrange for Colin's microphone? We cannot hear it at the moment, Colin. We will arrange for broadcasting to unmute you. That should be you there. Colin, we are having a bit of an issue hearing you, so we will try to get broadcast to fix your microphone. While we do that, can I hand over to Alan to address the same question? Alan, over to you. Thank you, convener. Is there Mike working there? Yes, it is. Excellent. I think that it is fair to say that, without CCS, in the Scottish cluster, the net zero ambitions for both Scotland and the UK will be extremely difficult, expensive and perhaps impossible to achieve. Also an opportunity to initiate significant export revenues for Scotland could well be missed. I think that the three key areas of focus would be the decarbonisation of industrial emissions, manufacturing, energy supply plus the jobs that go with that, the decarbonisation of heat of which there has already been significant discussion of that through the previous panel discussion. Also very importantly is the enablement of net negative emission technologies such as direct air capture, which enables some of those technologies that you simply cannot electrify like airplanes, aviation and many aspects of the business sector to decarbonise and eliminate their emissions. CCS basically is the foundation which all of those things are going to rely on and we need them for net zero. Thank you very much. I think that we are still waiting for Colin to log back in. So let me move on to my second question. Again, I think that you were listening to the first panel. We had quite a broad discussion on the key technical, financial and environmental risks associated with CCS. It would be useful if we could get your perspective on some of those key issues as well. Again, maybe I could start with Mike. Move to you, Alan, and then if Colin is on, we can bring in Colin. Mike, over to you. The first session covered this very angrily. In summary, the technology for the most part is well understood. It has been improved both in aspects of the North Sea and elsewhere. The capture techniques, again, well understood and indeed well used to help variety of contexts, not least here in the North Sea and in the UK sector. The question then is how do we build that together with our ability to manage the plans and the processes? Again, the expertise in the North Sea through the North Sea's own oil industry capabilities means that we understand both infrastructure management and pipeline management and the process plant management. The focus and the knowledge that we have are not least in things such as methane, methane abatement and the understanding that it means that we can get on top of the whole package. Of course, there will be learnings, but the skills and knowledge base will mean that we are starting from a unique perspective that others might be jealous of. Thank you very much, Mike. If I can bring in Alan on the same question. I saw that in the Scotsman article yesterday, you made the comment that the cluster sequencing programme has been, you called it, successful and has helped to galvanise the cluster formation for Scotland. In addition to the technical issues that I asked about, you could touch on that comment as well. Yes, of course, convener. I agree fully there with Mike. Technology is not an issue. In Scotland, we have been operating carbon capture projects for 30 years. There has been carbon capture operating in St Fergus for 30 years. For a different reason, not for climate protection, but for cleaning up our natural gas from the north. There is a huge amount of knowledge base in that, and it is simply a case of modifying that so that we can route those emissions out and back underground into the rocks of the North Sea, rather than simply venting the CO2 into the atmosphere, which is, of course, what we need to avoid. The other challenges here are that cluster sequencing has galvanised compared to just a few years ago in Scotland, where industry had largely stepped back from the carbon capture and storage space, the efforts made by the industry supported by Nexus in Scotland, and the cluster sequencing has brought that together such that industry and investors have been significantly mobilised and are ready to move now to execute and build these plants and reduce emissions. The areas that we have challenges with are in the areas of cost support mechanisms, particularly for those companies that will operate carbon capture plants. Previously, without that, the emissions will be released to the atmosphere. Now there is additional cost to capture those plants, part of which can be offset by not having to buy carbon EUAs or emission allowances, but it is those costs that are supported by the Government business models that the Track 1 clusters now have an opportunity to bid for. Those are the items that are the key challenges, but Scotland has significantly mobilised industry and investment and key resources, skillsets and workforce, which are ready to do that. Importantly, 64 per cent of the UK's underground offshore storage resource lies in Scottish waters, so there is a huge opportunity here for Scotland to make use of that. Thank you very much, Alan. Let me hand over to Fiona Hyslop to be followed by Jackie Dunbar. Fiona Hyslop will be helpful in the chat bar if we know we have Colin Mackay, because I have specific questions to him. Mike Tholen, how important is the Acorn project in Scotland? What importance do you think it is to the drive to net zero? What do you think needs to be done to make sure that it moves ahead as quickly as possible? That is to Mike Tholen. The Scottish Acorn project is really key to helping Scotland's economy to decarbonise, but also to solving the immediate challenge that you face in Scotland with key high-carbon-emitting industrial activities that we have to find a way for industry to transition in Scotland rather than simply cutting off at its knees. That journey allows a broader economy to mature and adapt to the change in a way that is effective for society. Coupled with that, the skills-based and knowledge-based that is within Scotland now really can adapt and grow based on the learnings from the Acorn project in a way that, as was mentioned earlier, will develop export capability potential like nothing else. I would be lucky enough to work overseas. When you go around the world, not least in the gas and oil industry, you will see that exports are working pretty much in every application of the industry globally. The lessons in the learnings from Scotland, hopefully in carbon storage, will also be transferable skills aboard on that basis. I want to come to Alan James. As we have just heard, the storage capability of Scotland is enormous, if not unique. Do you think that it is somewhat peculiar that the phase 1 criteria that was used by BASE did not involve the storage capability of Scotland for carbon capture and storage in its assessments? Is that something that you think should be revisited? Mike, if you want to come back on that as well, that was specifically for you. It is fair to say that the criteria for evaluation did not include the magnitude and quantum and potential of storage resource available. I think that the track 1 focus largely, as Professor Hazelbyn said, is on the large volumes of emitters. This is track 1. There is a start. We have to be very careful to ensure that accessing track 1 does not mean that there is no future for CCS in Scotland. It simply means that we will be behind track 1. One of the advantages that we have in Scotland is that we have offshore pipelines already in the water, ready to be reused. We have the potential to build, plant and infrastructure faster and can do a lot of catch up through that process. That is where I sit on that. We have already spoken about the importance of CCS for net zero. What needs to move forward with speed is clarity about the forward process with the UK Government and more detail about what reserved status means with respect to the procurement process. Do you want to comment briefly on that before I move on to Colin? This is one case in which we simply cannot rely on the two current solutions to meet the UK's needs. They might be slightly ahead, but this is not a single-track train line. We need all of these projects to happen and to happen at scale. The unique opportunity of the ACON project, both in addressing Scotland's needs but, as Anne has mentioned, is the offshore infrastructure, the capabilities, the knowledge of St Fergus. Those are things that, in any external competitive analysis, surely have to stand out as part of the long game. I have no doubts that the UK Government is thinking very hard, and I have no doubts that investors in that project are challenging the UK Government to look at the longer-term solution. As Anne says, this is not the end of the road for that project. It is a small setback, but you have so many advantages that it is simply inconceivable that the UK and Scotland will not see that project go ahead. It is a case of waking up and going on with it. It is a long game that needs to be put up and on. I am sure that we have to win. Thank you to Colin Pritchett for being so patient and reconnecting. I would like to ask Colin Pritchett, which I hope that we can hear from you now, how important carbon capture and storage is to Ineos and to give the opportunity to give you your remarks, which you were unable to do previously. Colin Pritchett, can you hear me okay this time? Brilliant. The concept for carbon capture and storage from an Ineos perspective at Grangemouth is that we have made a pledge to achieve a net zero by 2045, to reduce our own emissions on the site here. I guess that the key playing into the conversations of energy transition is that we want to do that while we continue to make products that will help others to reduce their emissions as well, and also products that are essential to our life, such as personal protective equipment, vaccines, ventilators and ethanol for hand sanitizers will be some particularly recent topical things. I guess that the last element of this one is to play our role in leaving the clean hydrogen revolution. I guess that there are a few elements to impact that in terms of enabling emissions to go from the central belt of Scotland. I have heard the first panel discussing fossil fuels. A lot of the CO2 that we would be looking to capture broader beyond Grangemouth would be from the cement industry by a mass CHP. And even within operation of a cracker yourself, there are some non-fuel or non-directly fuel-related emissions that carbon capture will come in. It is absolutely essential for us to be able to reduce those emissions by 2045 and also, as I say, the elements of just transition to continue making the products to help other people and enabling the hydrogen revolution for us to be able to get carbon capture and storage going within Scotland. Access from Grangemouth to Acorn is going to be by far the most efficient way. The plans that we have for taking material are further reuse of infrastructure, so national grid infrastructure to get CO2 back north from the central belt of Scotland. That will provide a route that will be probably the most cost-efficient route to decarbonise this area. The bits that are important to remember in this is that, again, we had some conversation this morning about if the cost of permits continues to go up and up and up, that will make the finance of the commercial imperative for carbon capture more relevant. It does, but those are both burdens that come on the business that the business cannot necessarily survive and still produce an internationally traded commodity. Until such a point in time as policy allows those costs to go to the consumer, we will need support in the on-going costs of carbon capture and storage. If it is going to cost us more to abate and CCS, that will be a cost that we will be looking for help from Government from in those support mechanisms. Acorn provides the lowest-cost options by reusing infrastructure for abating the carbon emission within the central versus Scotland, especially. I will now pass back to the convener for the other questions. Thank you very much. Fiona, I will bring in Jackie Dunbar to be followed by Mark Ruskell. Over to you, Jackie. Thank you, and I know that we are short for time, convener, so I will have the one question this time, if you do not mind. Hearing from both panels today, we can all agree that Scotland has a huge asset in the Acorn project. On those lines, can I ask the panel now what they think St Fergus and the Scottish cluster can do to evolve and adapt in the short to medium term to ensure on-going investment and to your jobs? I know that I asked the first panel, but I would quite like to hear the answer from the second panel, too, if you do not mind. Can I start with Colin? I can speak for what we are doing in Ineos in Grangemouth. We are continuing on with all of our engineering work and studies at this point in time in exactly the same way that we have been in track 1. That is because we see this as an imperative. The UK and Scottish Governments net zero targets and interim targets of 2030, especially for the 2030, cannot be met without the Scottish cluster going ahead. We are absolutely committed to supporting that and are continuing on with our engineering and efforts to support the Scottish cluster to deliver. How difficult is that to do without knowing if the Scottish cluster is going to go ahead or not? There are several levels to that question, but the main answer to that level is that you have to continue on with the understanding that the Scottish cluster has to go ahead. This is timing, not if, and it has to be addressed like that. I am sorry if I put you on the spot a little bit there. Can I ask Colin, please? Thank you, Mr Dunbar. The key issues around maintaining momentum and confidence in industry and working as hard as possible to encourage clarity from the UK Government on the follow-on pace for the process. One important aspect to bear in mind is that the Scottish cluster has been fortunate to be the recipient of significant UK Government funding through the Industrial Strategy Challenge Fund. The works around that are scheduled to continue until the middle part of 2023. There is a lot of work to be done to move that forward. I trust and hope that we can achieve clarity with regard to follow-on pace from UK Government well ahead of that, hopefully in the first part of next year. Thank you. To finish, Mike, please. I think that Colin and I captured the challenge, both as provider and customer of the project. I think that the broader context around the supply chain in Scotland has got a line of sight of the opportunities, and it wants to try and find a way to build those into its business plans in the years to come. As has been said, there has to be no doubt that this is not an if, but a when, and preferably sooner or certainly not later. That message is getting back very loudly to Governments both through Scotland and to the UK Government. Investors are certainly continuing to focus on the ACON project as being a vital part of the long-term decarbonisation strategy for Scotland and for the UK. Thank you very much. Back to you, convener, because I know that we are short on time. Thank you, Jackie. Let me bring in Mark Ruskell, to be followed by Monica Lennon. Mark, over to you. I was just reflecting on some of the comments that Professor Hazel Dean was making in the first session. He was talking there about, effectively, Government requiring the oil and gas industry to store carbon emissions on a compulsory basis as a requirement of licence. I want to ask Mike what the industry's view is of that. Specifically, given that we have 6.6 billion barrels of oil and gas in North Sea, how much of that can be captured and stored and over what timescale? Part of it is around the total demand for oil and gas in the UK. Over the next 30 years through to 2050, the outlook is something between 15 and 18 billion barrels of oil and gas will be needed to meet the UK's energy needs through to 2050. We sit there with a demand for energy, part of which is through hydrocarbons or in gas, that has to be addressed but has to be done in the most carbon-effective fashion. Within that context, CCS allows us to capture the emissions from those products in a way that is vital to part of the overall economy. Within a UK context, the emergence of a carbon storage business allows the UK, as for Europe, to take a position on how it wants to use CCS to abate the use of hydrocarbons at an all-pace. You were talking about not 6, but 15 to 18 billion barrels. How much of that could be captured under the ACORM project or future projects and what would be the timescale for that? That depends on how those projects emerge. The total demand for hydrocarbons, which is one that the Climate Change Committee pitches, is around 15 to 18 billion barrels. Within that CCS is seen to emerge by 2050 at a scale of between 100 and 170 million tonnes per year. The ACORM project is a small part of a much bigger scale of the projects needed to capture CO2. Only as that emerges can you abate the use of hydrocarbons through such a process. That will be an accelerating process over the next two or three decades. How much of that can be captured by 2030? The next 10 years is critical, or the next eight years is critical in terms of climate change. Let's go back to the 6.6 billion barrels figure again. How much of that can be captured through carbon capture and storage schemes and buried under the North Sea between now and 2023? What proportion is that 6.6 billion barrels? I apologize, I didn't interrupt. I stood around to the question precisely in those ways, because we have not got the capture projects in place. It depends on the scale of projects and the scale of ambition. The aim of the British Government is to have 30 million tonnes per year capacity by 2030. That will start to abate the use of hydrocarbons across the border with army. Just one quick question for Alan. The UK climate change committee said last week that there should be a cut-off point of 2023 beyond which efforts should be increasing other areas of commitments on CCS infrastructure are not secured. How confident are you as an industry that you will get that cast iron guarantee by 2023 and therefore we don't need a plan B? Cast iron guarantees are few and far between in industry and commerce, unfortunately, but given the imperative of the scale of deployment and the scale up of CCS, I have a large degree of confidence that we will continue to motor forward with the development of the project and contributing to storing CO2 through the Scottish cluster from 2027, which is what Bays have indicated the track 2 activities should be in their guidance. Okay, I know time is short, so back to you, convener, thanks. Thank you very much, Mark. I see that Liam Kerr has a brief supplemental in this area, or Liam, over to you. Thank you, convener. Very briefly, Mike Tollin. The Rusco there was asking you about carbon that you can put under, let's say, the North Sea. We heard some disagreement in the earlier panel about what happens to it once it's under there. What the integrity is of anything that you put under the North Sea might come out, it might not. Do you take a view, can you give the committee any reassurance that once carbon has been captured and sequestered properly, it's not going to come back out again or lead to certain negative consequences that we heard about earlier this morning? Sir, I'm curious to see it hasn't been portrayed. The knowledge of the North Sea's geology, not these, for instance, in the Acorn project, the Golden Eye reservoir is one where we understand the formations uniquely, so we're starting from really good advantages there, we know what we're working with. The science and knowledge around modelling and migration is well understood. The consequences of subsequent release are also being understood and imaged as part of the on-going work around CCS. The risks are not known and manageable, the technology of modelling is there and there's research going on all the time in the methods of detecting and modelling at a practical level. We're as best equipped as we're going to be for a technology that is part of a long-term gain. Without it, we will not meet net zero of 2050. With it, we have the time to take a measured reduction in CO2 emissions from the global and indeed the Scottish economy, which is what we're all after. Thank you, convener. Let me bring in Collette Stevenson, who I believe has to leave the meeting early, so let me bring in Collette at this stage, and then, Monica, I will bring you in after Collette. Thanks, convener, and apologies for that. Good morning and thank you for late good afternoon. Can I just ask about the direct to your capture facility? I want to ask about how the UK Government's decision impacts on the development of the new technology such as the direct to your capture and what scope there is for the DAC projects at other clusters as well. If I could maybe ask Mike first of all on that. Direct to capture is still very much an emerging technology, but one that has a lot of research from work going on at the minute. I probably want to defer to Alan James, who is actually working in some practice at St Fergus, other than to say that the net zero technology centre in Aberdeen is doing some excellent work with him to try and really get to the heart of this, but it opens up some hugely exciting opportunities. Okay, thanks very much, and can I pass over to Alan then? Yes, so we are moving to develop a direct to your capture project, which we're planning to locate in the northeast of Scotland. It will provide a service to emitters all over the UK to extract up to a million tonnes of carbon dioxide directly from the atmosphere each year, and it will support customers such as airlines, financial services, professional service firms, all kinds of different businesses. And fortunately, at the moment, we are hopeful that the first plant will not need any government support or business model from the UK government in order to move forward. But what we do need is we do need a route for transport and storage of the CO2 out into the North Sea. At the moment, that means that we will need to have an economic commercial licence from the UK government to do that. At the present time, that's only going to be available to track one cluster storage site. With regards to moving the system, the direct capture system to other locations, the technology that we're working with is a Canadian company called Carbon Engineering, and we hold a UK licence for that. We're now looking at options for setting up additional plants in the northwest of England and in the northeast around the east coast Can I just quickly comment on that, Alan? What are the implications for not having it as a cluster one? For building the direct air capture plant itself, we need to have a functioning transport and storage system for the capture piece and the transport and storage of two separate components. The transport and storage needs an economic and commercial licence to operate. That comes from Bayes and is only available for track one clusters at the moment. That is on hold until we can move things forward. It's an example where we're not dependent upon the money, per se, from the UK government to move this forward. We're dependent upon the economic licence and the provisions for long-term storage liability, which the UK Government has as part of its track one process. Can I quickly comment on whether there have been any talks at all as to when that is likely to go ahead or when you're likely to get that licence? It's hard to get clarity on what happens to the follow-on regions such as the Scottish cluster after track one. That's going to come forward very quickly. I don't know if Colin wants to come in quickly if there's any impact on him as well with that. Not in a direct sense, but I think that Alan makes the very valid point of all this conversation that this is a net zero conversation. What we need to control is the concentration of CO2 in the atmosphere. We can do that in two ways—one by not emitting CO2 and one by taking it out of the atmosphere. We should be doing both at the same time. Some of the points where we emit are going to be very challenging for us to stop those emission points, hence any technology that's going to result in negative emissions. Direct air capture, arguably by a mass CHP, capturing from distilling industries and so on. All of those are things that we should be trying to develop as well. I thank the convener for letting me in. Next up is Monica Lennon, to be followed by Liam Kerr. Monica, over to you. Thank you, convener, and good afternoon to our panel. We know that CCS is not new yet. Despite billions in support over the last decade, CCS remains largely unproven and untested at that scale globally. Can I ask the panel in turn what they think the main reasons behind this are? Could they explain why companies are not putting more investment into CCS? The public are asking about the extent of public subsidy. Could the Scottish project proceed without large-scale government subsidy? CCS, the business model, is still emerging. Part of the challenge over the last 10 or 15 years is how you mix CCS as part of a broader industrial activity. Going back long enough, there were discussions about whether CCS would work with coal at the Morganet power station, for instance. Clearly, that is something that we move back and on from. The emergent business models have been charged with the challenge. We know that it is a solution, but how we frame that solution more widely has changed a lot over the last 10 or 15 years. We have got to now, where people are understanding that the major industrial sources are the ones to pursue and that the technology marries well to that is actually what is unlocking the conversation. In the UK, there are also opportunities for a more mature carbon market, one where the price signals from carbon are again making the business model one which works in the first place of a society. On the back of that, as we see, it is depleted and finished with assets, pipelines and reservoirs in the North Sea. The timing is suitable to re-use and make the most of it and do it in a way that is economically efficient for society. I will push back on the largely unproven piece. Carbon capture and storage has been operating in the North Sea, in Norway, for over 25 years successfully at the Sleipner gas field. The technology is fully proven and works. I think why it has not scaled up and taken off is that, unlike some parts of Norway, most parts of the world and the UK have not had a business model or a commercial justification, if you like, or taking on the extra expense to implement it. Could the Scottish project proceed without Government support? I think that the transport and storage system that we have specifically designed, Acorn, has no interest in fossil fuel production at all. Our feeling is that there is an option to initiate that without Government support to emitters using emissions points such as the first direct air capture plant, which we have just spoken about, and the voluntary market. There is a direct air capture plant operating in Iceland, a small one, which has been in the news recently. This one in Scotland would be Europe's biggest plant and operate on a much bigger scale. The other part is Europe. There are large industrial emitters in Europe right now that are in receipt of European Union innovation funding who will need to contract their storage service by this time next year. If Scotland is not ready, contract ready to support that, then it is very likely that those emissions and that business will go to Norway and not Scotland. There are some options here for moving forwards. That would put infrastructure in place that Scottish emitters could plug into when the UK Government is minded to move forward and award contracts for difference to Scottish emitters. I was waiting for broadcast to move to call, and I have one more question for the panel. I would largely agree with Alan and Mike's observations. Technologically, CCS is proven. We know how to capture. We have been doing that in processes for decades. There are a lot of thousands of kilometres of pipelines transporting CO2 in America, and clearly the demonstration of the ability to sequester CO2 is the example from Norway. For me, the chief barrier is the commercial and all the policy framework that is beside that. If I was to talk about my business, we are effectively taking a commodity, a globally-traded commodity feedstock, and turning that into a globally-traded commodity product. There is a finite margin between those two, which is set by the markets globally. The producers wherever they are in the world, that is where they are going to try and make their profits from, their profit margin, which has to support their return on capital, paying their staff and their energy costs. In that gap at the moment, we have got cost of carbon. This is one of the comments that I was making earlier about how just driving up the cost of carbon does not make it any likely to invest in an option that costs slightly less than the cost of carbon. I have a business where my margins are being eroded between the two globally-traded feedstock and product. What would happen is that that business would go somewhere else in the world, where it is not facing either of those two costs or policy drivers. That is something that has been seen within that, the principle of offshoring. In that particular area, I would recommend the work from Professor Karen Turner at the Centre of Energy Policy at Traffitide University, who has done a lot of work in that area and can demonstrate the principles of what is happening. What that does get to is that you need, at least initially, to have the support of a mechanism that helps to cover largely that cost of carbon from the business until such time as you could develop the policy to be able to make sure that the costs are transferred on to the consumer. The ideal would be a global trading scheme, because then every product everywhere in the world would actually have the full embodied cost of carbon in there and consumers would have the decisions. Practically, that is going to be very difficult to produce, so we have to scale the ambition back to something that tries to get that same effect. As an industry, we would say that we need that initial support to be able to start to get carbon capture and storage working as a way to decarbonise going. Over time, we would feel that that needs to transition to a policy of effectively seeing the costs transferred on to the consumers so that we would actually have that in as a margin so that we can continue to operate and continue to employ within the area, but not be dependent on a support mechanism from the Government. That probably would make us feel as nervous long-time as it would if the Government were to be honest with us. There are lots more questions that I could ask, but there is not a lot of time. I am just wondering, thinking about the business model and I will put this question to everyone in the panel. Thinking about the business model, how reliant is that on the policy of maximising the economic recovery of oil and gas continuing? Does it rely on projects like Campbell coming on steam? I am asking this also because the public are not fully convinced about CCS that it is the right climate solution, especially when they hear some of the main supporters of it also wanting new oil fields like Campbell. How do we address those concerns for people who are not fully convinced and feel that there are mixed messages and perhaps based interest? We will call and ensure on-screen and then come back to our other panelist. The business models that we are working at from a CCS point of view, I do not believe, are completely dependent on, or even would necessarily support, continued extraction of carbon fossil fuel. There are the process emissions that we discussed earlier on cement. There is sport required for energy from waste, potentially for direct air capture, other biomass type biogenic sources of CO2 because it comes back to that same approach of we can tackle this problem by reducing emissions or by taking carbon out of the atmosphere. Probably it should be and rather than all that we should do together. Listening to the first panel as well this morning, I think that there is a lot of conversation about is blue hydrogen or green hydrogen right? Do you know what? Both are probably right. Is electrification of heat in the home's right or is hydrogen in the home's right? Again, both are right. That is part of the challenge. Honestly, on government for setting the policy in place, you hear a lot of people saying that this approach is right and that approach is wrong. At the moment, we need to progress all of these altogether. In some ways, it is not the best of answers, but in other ways, it is saying that any decision that in any way reduces the CO2 that is in the atmosphere has got to be a good thing to be doing. There are a couple of facets to the question, as has been mentioned. Public acceptance of carbon capture and storage, there are a lot of change that society is going to face in the next 30 years. Public acceptance of charging electric vehicles, heat air pumps, all those sorts of things, we are collectively taking ourselves and society through enormous change in the years to come. That is the energy transition in the nature. In every aspect of it, we have to do so responsibly, focus on the environmental impact and focus on the consequences for society both of doing it and for our failure to do it. The role of CCS in part-out border context is irrefutable if you want to be able to ensure that the economy of Scotland stays strong through that transition does so in the most carbon-efficient and effective way. When you look at the role of the North Sea in providing oil and gas, of which Canberra is a totemic part at the minute, then, as has been mentioned in the earlier discourse, not least from Stuart Hazeldine, the hydrocarbons we can produce at home, first of all, we can ensure those at the top of the environmental gain so that they are produced in a way that is environmentally responsible and better than imports. The consequence of that, both in our ability to contribute to society through the activity, the jobs, the skills, allows us to keep going through that transition in a way that meets the UK's needs rather than simply importing and doing nothing for society here in the UK. It is a combination of both. MER and Maximise Econoc Recovery is walking hand in hand with a net zero strategy. The two work together both for oil and gas authority and for the UK. It would be utterly irresponsible for us to look otherwise nor even considering that. I have been working in carbon capture and storage since 2007 when I left the oil and gas industry. If I was ever concerned that carbon capture and storage was simply a reason for continuing fossil fuel production, I would probably have stopped way before now. As far as I am concerned, there is no reliance of CCS on MER strategy or on CAMBO or developments that are too disconnected. We need to do what we need to do. We need all the tools in the toolbox at the moment, as many folk have recounted. This is a climate emergency. We need blue, green hydrogen, we need CCS, we need renewables, heat pumps a whole lot. I think that there is really no connection. Even if we were to stop oil and gas production tomorrow, which we won't and we can't and we shouldn't, we would still need CCS to take the carbon out of the air and how we are going to manufacture wind turbines, the huge volume of wind turbines that we are going to need for renewables. How would we do that? CCS is all about tackling the emissions issue and not really connected to MER and CAMBO in a specific way. That's helpful. Thank you. Thanks very much, Monica. Let me bring in Liam Kerr over to you, Liam. Thank you, convener. I'll be very brief and direct a question to Alan James, please. Alan, you've just talked about emissions. Eric Dahlheisen, in some papers that he's submitted to this committee, said that we need about 98 to 100 per cent capture efficiency in order to achieve net zero emissions when dealing with fossil carbon. He suggested in that paper that capture efficiency is currently running at about 60 per cent. The question that I put to you is, is he right on one or both of those assertions? In any event, how might we anticipate efficiency improving over time? I think that it's important to understand that my definition of efficiency is the amount of carbon that you release from a plant compared to the amount of carbon that you capture from the plant. A 95 per cent efficient plant would capture 95 per cent of the emissions and just have 5 per cent that go into the atmosphere. I think that on all of the capture projects that I've been looking at, the capture efficiencies are in excess of 90 and are approaching 95 per cent for some of them. The role of negative emission technologies such as direct air capture and then mop up that last 5 per cent by taking the CO2 out of the atmosphere that that balances off. I think that the 60 per cent number is a number that I don't recognise at all. Thank you. Since you answered that so concisely, convener, you mentioned direct air capture. I met with carbon engineering the other week and they introduced me to the idea of direct air capture. Personally, I found that pretty exciting because it sounded as though what they were saying was that you effectively take excess carbon emissions from the air and sequester them. Is that right? Is that not game-changing in terms of what we can achieve in keeping ourselves as low as possible in terms of heating? Game-changing technology. It is not a replacement for fitting carbon capture on to Colin's plant at Ineos or the SSE plant or any industrial plant. That should be done. However, what it can do is it can remove CO2 directly from the atmosphere, which is the last 2 or 3 per cent that carbon capture plants cannot get to. The other important thing is that it provides us with an ability to time travel and take out the emissions that we put into the atmosphere three years ago when we were allowed to fly on holiday. We can go back and take that out of the atmosphere. Those are things that we are going to have to do in order to reduce the climate warming effect on a global scale. Let me bring in Mark Ruskell, who wants you to follow up on a previous discussion. Mark, over to you. Thank you very much. Colin, I just want to ask you about hydrogen because my understanding of hydrogen is that it will be a very precious energy commodity that will need to decarbonise those really hard-to-abate sectors such as steel, for example. Do you see the need to deploy a hydrogen hierarchy where we are prioritising the use of hydrogen for those hard-to-abate sectors and perhaps de-prioritising decarbonisation of the way that we heat our homes, or do you think that it is more of everything? I think that the solution will be in a more of everything that probably came from my previous answer. I'm sorry if I mis-catrised that. I just got a sense that it's a hydrogen, basically. I don't mind the more of everything because it's about the different applications that will have different requirements. It's very easy to see hydrogen of any colour or origin having a very key role in industrial heat provision by the nature of it and the kind of quantity and the nature of the heat that you're needing. You can see that there will be some places where ground source heat pumps will be very applicable. In Scotland, in areas that are off-grid, it's a very obvious solution, but in areas in the centre of Glasgow, when you've got flats, it's not an obvious solution and maybe hydrogen boilers on that particular application are far more appropriate. I think that your question actually talks to the challenge that is there. There isn't a single solution that will deal with all of this achieving net zero. It's a look at the application and think about what is the most appropriate solution. I think that the idea that we would say hydrogen is precious and only this sector or only domestic gets it would perhaps be a little bit of a simplification. I think that we actually almost have to look at each and every application and work out what is the best way to do that. It might even be different for the same industry in different locations. Thank you very much, Mark. That brings us to the end of the question, so let me thank Mike Collin and Alan very much for coming along to the panel, sharing your expertise and your perspectives and your insights across a number of areas. Again, we started a bit late, but I think that we've caught up in a bit of time. This is a topic that we will no doubt return to next week. We are taking evidence from the Climate Change Committee. I'm sure that this will be on the agenda as well as a topic to discuss. Thanks again. Enjoy the rest of your day, and I now close the public part of this meeting. Thank you.