THIS month, Keir Starmer announced a £21.7 billion subsidy for “carbon capture and storage” schemes, claiming this was all about “clean energy” and jobs.

But the big worry is that Labour has put an oil industry scheme at the heart of its “environmental” policies. It is going to throw big money at a “green” scheme which isn’t really green at all.

It is going to hand billions to companies like oil firm BP or wood-burning mega-power station Drax or Italy’s energy giant Eni, mostly because these companies could afford to lobby the government and hire their mates.

Starmer was announcing subsidies for firms ready to work with two carbon capture schemes, Hynet on Merseyside and the East Coast Cluster. The announced subsidy is over a 25-year period, but that still implies around £4bn over the life of this government.

As Chancellor Rachel Reeves took City of London advice and tore up her plans for a £28bn “green industry” investment in favour of a much smaller £7.3bn fund, this suggests these schemes are a significant slice of Labour’s proposed “environmental” investment. This means what was once meant to be a Green New Deal now rests heavily on subsidising schemes with Eni (Hynet), Drax and BP (East Coast Cluster) at the core.

Carbon capture and storage is meant to be a way to burn fossil fuels (oil or gas) while radically reducing the CO₂, a greenhouse gas released into the atmosphere. The CO₂ could be removed by a “scrubber” in the chimney of the power station or cement plant, then pumped away and stored underground, often in the empty old offshore oil and gas fields.

In one tweak, it becomes “carbon capture, use and storage.” The “use” is that the CO₂ pumped into the oil field is also used to squeeze out the last bits of hard-to-reach oil in the underground rock formations. In another wrinkle, “carbon capture and storage” is used for “blue hydrogen” — natural gas that is pumped out of gas wells is heat treated to turn it into hydrogen, which can be used as a fuel because it does not give off CO₂ when burned.

However, the production process for this “blue hydrogen” actually creates loads of greenhouse gases. In theory, they can also be taken away by “carbon capture and storage.”

So carbon capture and storage is presented as a way to use oil and gas for heavy industry but reduce their greenhouse gases. But there are four problems.

First, it’s a very unproven technology. We don’t know if it will really work. The ways to “capture” the carbon, like the “scrubbers” on the chimneys, haven’t been shown to work on scale. Nor is there any “storage” in old oil and gas wells that are properly working.

The most developed, run by Chevron oil as part of the Gorgon oil field in north-east Australia, was supposed to have begun working in 2017 but still doesn’t operate properly.

Second, it is clearly influenced by the oil and gas companies. It allows their oil and gas to get burned or converted into hydrogen. And they just happen to have the old empty oil fields that are being proposed to store the carbon.

They are the biggest supporters of carbon capture because they are the main beneficiaries. Other “green” technologies could reduce “greenhouse gases,” but they are not backed by companies as big and rich as Chevron or BP.

It’s hard not to suspect the oil giants are pushing this very uncertain technology that may not work because if it does, they are the main winners, and if it doesn’t, this has been a useful diversion that allowed them to keep working and stopped their non-oil competitors getting ahead.

The third problem is the subsidies and schemes Labour announced were all drawn up under the Tories. It looks like they are continuing a Conservative plan. Carbon capture and storage is in the Labour manifesto, but so are other policies like insulating homes or planting trees. However, in practice, it is the Tory-and-oil-company-backed plan that came out on top.

The fourth problem is the energy giants have got loads of money to pay for lobbying, so it’s easy to believe that lobbying, not the technology, wins government support.

This feels very obvious from visiting Labour’s conference in Liverpool. The carbon capture and storage association (CCSA), the main lobby group, had an extra-large stall in the middle of the conference.

It was covered with models and drawings of its schemes — they have to be drawings and models rather than pictures and films because no schemes are actually up and running.

This stall was manned by one of CCSA’s public affairs team, Joe Butler-Trewin, who was previously an assistant to a Labour MP and was a regional organiser for the Starmer leadership campaign in 2020.

At the Labour conference, the CCSA co-hosted one of the energy “receptions” — this means it paid for the room and drinks, with Energy Minister Sarah Jones as a key speaker, while the companies that are CCSA members were also pretty busy making friends.

There are Labour MPs, including those on the left, who are keen on the government’s announcement of investment in carbon capture and storage. It’s hard not to be attracted to big investments in work that could generate well-paid skilled jobs in north-east and north-west England. But the technology is very uncertain.

To me, it would justify a smaller investment in research or a demonstration model. The larger investment should go to more proven technologies, like planting those trees, insulating those homes or backing solar and wind power, which could and should get more backing.

The simple fact that carbon capture looks to have the bigger, better-funded lobby and is backed by energy firms like BP or Drax, who have a very bad record of fake “green” claims, makes me think this will not end well.

Follow Solomon on X @SolHughesWriter.