London (Platts)--4Apr2008

The UK has failed to take a lead on carbon capture and storage technology
development, acording to a report published by think-tank Policy Exchange
Friday.

The report blames confusion over government policy and timescales for
halving the number of CCS projects proposed in the UK and delaying their
start-up.

"The government's timetable for the first CCS plant has slipped from 2009
to 2014," said Tara Singh, one of the report's authors. "It is a single, small
station. As a result, demand in the CCS industry has contracted. Britain could
have taken an environmental lead by having a CCS plant operating as soon as
next year at Petershead but the governmnet's failure to put in place a
creative funding package means that the plant will now be built in Abu Dhabi."

The loss of a proposed BP project for a clean power plant in Peterhead
storing CO2 in an offshore oil field has deprived the Treasury of GBP1 billion
($2 billion) in oil revenues, the report says, as the storage of CO2 would
have enabled more oil to be produced as a side-effect.

E.ON UK is planning to build a new coal-fired power plant at Kingsnorth,
but has asked government to delay granting planning permission until the
government has decided what it wants new power plants to have in the way of
CCS technology or readiness to fit CCS technology.

"The government has in place no clear guidance on how carbon should be
transported and stored," said Singh. "The government needs to decide on
standards."