£80m carbon capture cash was shelved after Greens threatened SNP pact

Vital funding to accelerate a carbon capture and storage project that could create thousands of jobs in Scotland was shelved after the Scottish Greens threatened to put their power-sharing agreement with the SNP at risk, we can exclusively reveal.

It is one of a series of stark revelations uncovered by a Sunday Post investigation into why £80 million promised by the Scottish Government for the landmark Acorn project has yet to materialise.

The Acorn project would see harmful greenhouse gas emissions piped under the North Sea and then stored, creating almost 5,000 long-term jobs and billions of investment for the Scottish economy.

But we found squabbling between political factions and attempts to shift blame have caused the money to be held up at a time when the north east is haemorrhaging jobs.

The SNP offered up the cash to encourage the UK Government to rethink after the Scottish Cluster, a group of decarbonisation projects focused on Peterhead Power station, missed out on funding in 2021.

But earlier this year, SNP energy secretary Gillian Martin admitted there were no plans to pay out and claimed that investors do not currently need the cash.

Previously unseen private communications, memos and briefing notes show:

• The Scottish Greens threatened to publicly disagree with the government’s energy strategy if it handed out the £80m for carbon capture – a move that could have put the Bute House agreement in jeopardy.
• Emails sent between senior SNP figures and notes issued by special advisors indicate the funding was not originally conditional on UK Government support – as SNP ministers now claim.
• There was nearly three months of delay in discussing the funding at ministerial level while jobs were placed at risk.
• Net Zero secretary Michael Matheson was rebuked by UK energy minister Greg Hands for releasing details of their “confidential” meeting so he could make an announcement ahead of an Environmental Information Request going public.

Last night the GMB union described the revelations as “shocking confirmation of ministers’ inertia as a jobs catastrophe looms in the North Sea”.

Meanwhile, nearly £22 billion has been promised over the next 25 years for Merseyside and Teesside, supporting thousands of roles.

What does the Bute House memo say?

A Bute House memo dated December 2022 – nearly a year after the £80m was announced – illustrates the power the Greens held over government energy policy at the time.

It states the group had already been handed assurances of changes made in “several areas”. The author, Green MSP Mark Ruskell, notes this is particularly the case in the Just Transition chapter of the government’s plans.

© KATIE NOBLE

The note says the Greens would “likely need to publicly disagree” with elements of the Energy Strategy and Just Transition Plan if it was published in its current form.

It states the party would like to see any financial support for carbon capture and blue hydrogen come out of UK Government money, “reallocating Scottish Government funding for other pressing priorities”.

It adds that this includes reallocating the £80m projected spend from the Emerging Energy Technologies Fund on the Scottish Cluster.

The Scottish Government had previously warned withdrawing the funding would give the impression that it no longer supports Acorn and would be contrary to the Bute House Agreement – an argument refuted by the Greens in the memo.

Jobs ‘still at risk’

Scottish Conservative energy spokesman Douglas Lumsden said: “This internal memo, hidden until now, shows the extremist Greens have had a veto on SNP energy policy for years.

“Although the Emerging Energy Technologies Fund promised £80m to develop the Scottish Cluster, the Greens said no. Then it was canned.

“Tens of thousands of Scottish jobs remain at risk because Patrick Harvie’s paw prints are still all over Scottish Government policy.”

© DC Thomson

Environmental groups are sceptical of carbon capture and argue it props up the fossil fuel industry by hiding emissions, rather than cutting them.

But the energy firms behind Acorn estimate the project will add £17.7 billion to UK GDP by 2050, create over 10,800 jobs during construction and sustain 4,700 long-term operational roles.

It has been listed since 2023 as one of two new carbon capture projects awaiting formal backing by the UK Government following approval of the two clusters in England.

Greens stand by carbon capture stance

Scottish Greens co-leader Patrick Harvie said his party has always been sceptical about both the Scottish and UK governments putting too much reliance on “untested” carbon capture technology, adding that it is firmly opposed to using it as an excuse for more fossil fuel extraction or burning.

He said: “At best – if it ever works – it could reduce emissions from the residual use of fossil fuel while we do everything we can to shift to renewables.

“But it’s too often being used as an excuse for business as usual, which is why it’s no surprise to see the anti-environment Conservatives backing it.”

© Jane Barlow/PA Wire

The Scottish Government claims the delay in handing over the money is linked to the UK Government taking so long to approve the project.

However, internal memos and correspondence reveal no such conditions were in place when the money was first allocated.

In a letter to Shona Robison in December 2021 – six weeks before the Acorn funding announcement – Michael Matheson said the Scottish Cluster would be supported without caveat by the same £80 million from the same fund.

This is parroted in a number of other pieces of correspondence sent by Matheson that have subsequently been obtained by The Sunday Post.

Around six weeks later, advisers began to gameplan the “conditionality of funding point”, adding that the “key point to make would be that the £80m is not enough, and UKG support is still required in terms of access to business models etc.”

SNP minister rebuked

We can reveal officials were then left scrambling to put out an announcement because a letter from Matheson to UK energy minister Greg Hands referencing the cash was set to be released to the public through an Environmental Information Request.

But Matheson was given a dressing down by Hands on January 19 2022 for making the announcement following what was supposed to be a confidential meeting.

Hands wrote: “You had been seeking a meeting with me for some days, which I agreed to, but at no point during what I understood to be a confidential meeting between two ministers, was it said that a media notification would follow the meeting.

“Instead, we had I thought, agreed at the meeting that the two governments would work together, which is what I believe the Acorn project would want, and the people of Scotland would expect.”

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Hands says he told Matheson during the meeting that the £80m funding “needs careful consideration but does not address some of the key challenges”.

These include the likely burden of ongoing revenue support payments and practical constraints of supporting multiple carbon capture projects in three different areas of the UK to launch at the same time.

Further correspondence reveals the Scottish Government was not notified the Scottish Cluster would not be included in a list of fast-tracked projects before the announcement was put out publicly.

© Thomas Krych/ZUMA Press Wire/Shu

Three meetings between Matheson and Hands were arranged and then cancelled around this time and there was no direct response to the funding offer in Matheson’s letter to the Chancellor in October 2021 or a subsequent letter from the first minister to the prime minister the following month.

This meant there was a nearly three month delay in discussing the funding proposal at a ministerial level.

‘Inertia and inaction’

GMB Scotland secretary Louise Gilmour said needless delays in driving through investment for Acorn exposes the abject failure of UK and Scottish governments to protect the sector or deliver new jobs in green energy.

She said: “Offshore production and onshore supply chains are in crisis with thousands of skilled jobs on the line but, behind the scenes, our ministers are apparently spending their time on spin and squabbles.

“There is clearly no joined-up thinking between our governments and no concerted plan of action. Instead, there are politicians playing games.

© Andrew Cawley

“There is only inertia and inaction while thousands of well-paid jobs are in peril along with the families and communities that rely on them.”

The Scottish Government said its Programme for Government “made clear” that it is committed to the £80 million of support.

However no actual funding was allocated and the project was not even mentioned in the 2025-26 Scottish Budget.

The government added that the funding is “contingent upon the UK Government confirming a full-funding package and timeline for the Acorn project at the Spending Review”.