Prime minister also outlines plans to grant more than 100 new oil and gas drilling licences

Rishi Sunak has confirmed funding for a carbon capture facility in north-east Scotland two years after the project was overlooked for government backing.

The Acorn project in Aberdeenshire controversially missed out on the first round of government funding in 2021 despite being one of the most advanced in the UK.

The Conservatives were accused at the time of favouring ‘red wall’ constituencies by backing carbon capture and storage projects (CCS) in northern England instead.

Carbon capture facilities collect greenhouse gas emissions from fossil fuels and carry them to the seabed where they are stored. The technology is also seen as a key enabler of hydrogen, a clean energy source which emits only water when burned but emits large amounts of carbon during production.

The Aberdeenshire scheme, in St Fergus, is a joint venture between Shell UK and other energy firms and would be Scotland’s first carbon capture facility.

It will be the fourth facility in the UK, with sites at Merseyside, North Wales and Teesside already in development as part of the government’s £1bn CCS fund announced in 2021.

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Rishi Sunak said the new drilling licences would reduce the UK’s carbon footprint

Sunak’s announcement of the facility came as he unveiled plans to award more than a hundred new oil and gas licences in the North Sea.

The prime minister argued the drilling licences would reduce the UK’s carbon footprint as it would be less energy intensive than importing fuel from abroad.

Under the government’s goals to reach net zero by 2050, a quarter of UK energy would still come from oil and gas, with the emissions removed from the atmosphere with CCS facilities.

The move contrasts sharply with the policy of Labour, which has said it will impose a moratorium on all new drilling if it wins the next general election.

But energy secretary Grant Shapps said the new licences would strengthen the UK’s energy independence.

“Energy security is national security. Since Putin’s illegal invasion of Ukraine the Government has driven Russia from our energy market, paid around half of a typical family’s energy bill and grown our economy by driving forward major energy projects.

“This week we will go even further. Forging ahead with critical measures to power up Britain from Britain – including supporting our invaluable oil and gas industry, making the most of our home-grown energy sources and backing British innovation in renewables,” Shapps said.

In the March budget, chancellor Jeremy Hunt laid out plans to spend £20bn on carbon capture schemes across the UK. He also launched Great British Nuclear, a new body which aims to support small and large nuclear projects.