Exclusive:Use £5bn oil and gas revenue to fund Acorn carbon capture project, says SNP

SNP Westminster leader Dave Doogan has said the money projected to have been raised by the windfall tax on oil and gas giants should go towards the Acorn carbon capture project.

The project in Aberdeenshire was due to receive £200 million in grant funding from the UK government.

But Chancellor John Healey caused a huge row when he changed the commitment to offer the same amount in loans or receive an equity stake in the project.

Read more: Only £12m of promised £200m of UK grant funding will be handed over to Acorn carbon capture project

Angus and Perthshire Glens MP Mr Doogan said: “The UK Labour government has banked revenue from Scotland's resources while at the same time defunding our principal carbon capture project.

“Every single penny from our oil and gas should be invested in Scotland and the starting point is the Acorn site in Peterhead.

“Westminster has robbed our trillion pound future from us and this week they repeated the trick - £5bn syphoned off for investments in England while taking a sledgehammer to Scotland's industrial future.

“This is a simple injustice known all too well to Scots - our energy robbed, hidden and squandered by Westminster while Scottish jobs are ruined while our energy bills go through the roof.

“Through a fresh start with independence we will choose to put the 80% of UK oil and gas production and the one third of UK renewable generation in our own hands - Scotland’s hands.”

Read more: 'Spectacular shambles' as Labour's carbon capture funding descends into chaos

The project, being brought forward by partners including Storegga and Shell at the St Fergus gas terminal near Peterhead, could support up to 15,000 North Sea jobs - while the Scottish government’s net zero blueprint is reliant on the facility being constructed.

But The Scotsman has learned that only £12m of the promised £200m fund has been handed over to the developers, with no more direct grant cash to follow other than the 6 per cent proportion of the vowed grant.

UK government energy minister Martin McCluskey said it had been necessary to “reprioritise” budgets to prioritise investing in defence, but that the UK Government wanted to support the project.

He said: “We awarded £200 million in grant funding at the last spending review.

“Some of that has already been drawn down by the developers, and the money that they’ve already drawn down remains in place.

“For the remainder, and for any future support, instead of it being through grant funding, it will be through loans and equities.

“Why are we doing that? We’re doing that for two reasons. Firstly, loans and equities are better value for the taxpayer. It means that perhaps we could choose to take a stake in that project, which would give a return to the taxpayer.

“But second, we’ve had to make some really difficult choices to reprioritise within budgets in order to fund the defence investment plan, which is obviously a priority for the Government.”

Mr McCluskey said the UK government has had to “reprioritise” carbon capture and storage programmes right across the UK, and that a number of programmes have actually been stopped, not just reprioritised in terms of loans and equities.

He added: “We are making sure that there is support there for the Acorn project.

“We want that project to succeed, and the developers who I’m speaking to later this week will come forward with proposals, and that funding is on the table.”

A UK Government spokesperson said:

"We recognise Acorn’s role in supporting good, well-paid jobs and reindustrialisation in Scotland.

“Acorn will continue to receive its existing grant funding until the end of the year. Future support will be through loans or equity stakes that need to see the taxpayer receive a return.

“An equity style investment would also allow for a closer partnership between the government and Acorn, allowing us to drive a better outcome for taxpayers and the project.”