Beyond £50 Billion and Counting: Is the UK’s CCUS Strategy Turning into a Money Sink?

The UK Government has pledged more than £50 billion to scale up carbon capture, utilisation and storage, or CCUS, by the middle of the century. But according to a new analysis from the Institute for Energy Economics and Financial Analysis (IEEFA), that figure won’t come close to hitting the country’s capacity targets.

IEEFA, an international think-tank focused on accelerating the global shift to low-carbon energy, warns that the current funding plan would only support around 8 per cent of the CCUS capacity needed by 2050.

The Labour-led government recently committed up to £21.7 billion in funding over the next 25 years to support both CCUS and low-carbon hydrogen production. This builds on the previous government’s pledge of £20 billion over 20 years, which was explicitly earmarked for CCUS.

Beyond direct funding, the government is offering a mix of subsidies, tax incentives and innovation grants for CCUS operators. Additional financial support will also be made available for carbon transport and storage infrastructure, using both loans and grants.

The government’s broader goal is to deploy enough CCUS to capture at least 75 million tonnes of carbon emissions annually by 2050. In a more ambitious scenario, that number could climb to 180 million tonnes. These targets are aligned with the UK’s net-zero commitments.

But here’s where the math doesn’t quite add up. According to IEEFA, the £50 billion in proposed subsidies would be sufficient to deliver only a fraction of that goal. To achieve nearly full deployment, the UK would need to invest approximately £408 billion by 2050. That translates to about £5 billion annually by 2030, rising to nearly £19 billion per year as the infrastructure expands.

“Given the technical immaturity of CCS and its track record of cost overruns, this £50 billion subsidy amount is likely the tip of the iceberg,” said Andrew Reid, an IEEFA energy finance analyst and author of the report.

He said that, while some CCUS is necessary to reach net-zero, Ministers should “avoid excessive CCS support at the expense of alternative solutions to reach net zero”.

This has raised tough questions about where that money will come from—and who will ultimately bear the cost.

The Public Accounts Committee has already flagged concerns. In a recent 2025 report, the committee criticised the slow progress of the CCUS programme, noting that the government only just signed contracts with the UK’s first two major CCUS cluster projects, two years behind schedule.

The committee is urging ministers to revisit their strategy. It suggests using the upcoming Carbon Budget Delivery Plan to reassess whether it makes more financial sense to invest in direct emissions cuts in heavy industries, rather than relying so heavily on CCUS. It also recommends setting clear deployment targets for 2030 and offering guidance for smaller, standalone CCUS projects.

Industry group Carbon Capture and Storage Association agrees. In a statement, the association said it “fully supports” the call for updated targets and greater transparency on how taxpayer money is being used.

The conversation is shifting, from how much to spend, to how wisely it’s spent. And with the clock ticking on the UK’s net-zero goals, the pressure is mounting to get it right.