'Deep concern' as main backer of Acorn carbon capture and storage scheme pulls out

Sir Ian Wood called on the UK and Scottish governments to “leave no stone unturned” to secure the future of Scotland’s only such development, earmarked for St Fergus in Aberdeenshire.

He also called for the scrapping of the “windfall tax”, or energy profits levy, on excess profits by energy companies, which had caused “serious damage”.

The UK Government said the Storegga move would not affect the project’s commercial viability.

The Acorn scheme was given £200 million of funding under the UK Government’s spending review in June, but principal backer Storegga announced on Thursday it was selling its interest because a “new long-term owner would be better placed to take the project forward”.

The development would transport carbon dioxide from the energy sector for long-term storage deep underground to prevent its release into the atmosphere, to reduce carbon emissions.

READ MORE: Acorn carbon capture: Crunch talks as Scotland wind farm chiefs poised to wrestle over seabed

Environmental campaigners Friends of the Earth Scotland described Storegga’s move as a “huge embarrassment” to the Scottish Government and said its political “gamble” with the technology would not pay off, as there was “overwhelming” evidence it would not work.

Sir Ian, who chairs energy transition firm ETZ, said: “This news is deeply concerning for Scotland and the UK’s energy transition, and I urge the UK and Scottish Government to leave no stone unturned in their efforts to secure the future of Scotland's only carbon capture cluster.

“The Acorn project is a cornerstone of Scotland’s energy transition. Its strategic value lies not just in the thousands of jobs it will safeguard and create, but in its enormous potential to unlock further investment, drive innovation, and build a viable path to decarbonisation. It must now be supported to proceed.

"The situation is particularly acute across the north east of Scotland where we are losing jobs at an alarming rate.

“It is now incumbent on the Prime Minister, visiting Scotland today, to act decisively and end the existing windfall tax now, particularly, given, by their own admission, there is no windfall.

“This would secure the world-class jobs and company base that will be so vital in delivering the vast opportunities in renewables when they are available commercially and at scale.”

First Minister John Swinney said his deputy, Kate Forbes, was discussing Storegga’s withdrawal with the UK Government.

He told MSPs at First Minister’s Questions: “Acorn is a significant project that is key to the just transition and to the economic opportunities of the north east of Scotland.

“The Scottish Government will do all that we can to support its development.”

Mr Swinney said he would ask Keir Starmer to scrap the energy profits levy when he met the Prime Minister on Friday. He described it as a “significant inhibitor” to supporting the energy sector.

A Storegga spokesperson said: “We recently completed a strategic review of our business, capital requirements and future structure.

“As part of this, we are progressing a structured sales process for our portfolio of assets, including the sale of our interest in the Acorn CCS project.

“With Acorn approaching a more capital-intensive phase, and with both the UK and Scottish governments signalling the importance of its timely delivery, we have concluded that a new long-term owner would be better placed to take the project forward.

“This step reflects the intentions of our existing shareholders, who have supported the company in achieving several milestones to date and are now making way for new ownership to accelerate the next phase.

“While this process is underway, work continues across all of our projects to maintain momentum and ensure they remain well positioned for a smooth transition to new long-term owners.”

A UK Government spokesperson said: “This commercial decision by Storegga Ltd has no bearing on the commercial viability of the Acorn CCS project.

“We remain committed to the project and are working closely with the Scottish Government and industry to secure a buyer and realise the site’s potential to create thousands of jobs and drive industrial renewal in Scotland.”