The UK Government wants to see the Acorn carbon capture and storage project succeed, a UK minister has said, after concerns were raised about the way it is being funded. The project in Aberdeenshire was due to receive £200 million in grant funding from the UK Government, but Chancellor John Healey changed the commitment so that the same amount would be offered in loans or taken as an equity stake in the project, according to Press Association reporting.

Scotland's First Minister John Swinney said he was deeply concerned, calling Acorn absolutely central to climate action and to the reindustrialisation of Scotland. Acorn, which could support about 15,000 jobs at its peak, proposes storing emissions from across Scotland under the North Sea seabed. UK energy minister Martin McCluskey told the BBC's Sunday Show that funding already drawn down stays in place, and that for the remainder, and for any future support, instead of grant funding it will be through loans and equities.

Why the government says it changed tack

McCluskey said budgets had to be reprioritised to prioritise investing in defence, and that loans and equities are better value for the taxpayer because they could give the taxpayer a return, including through taking a stake in the project. He said some UK carbon capture programmes have been stopped outright, but support for Acorn remains on the table.

Confusion over the £200m

Ministers have been accused of causing confusion over the funding. Chief Secretary Emma Reynolds told the BBC there had been no cut to the £200 million, while also saying loans or equity stakes may be needed for the project's future. The Department for Energy Security and Net Zero said Acorn will continue to receive its existing grant funding until the end of the year, with future support through loans or equity stakes that need to see the taxpayer receive a return. Whether loans or equity can carry a project built around grant funding is now the question for the developers.