SNP urges Healey to fund Acorn carbon capture from oil and gas revenues
The Scottish National Party is calling on the UK Government to use £5bn in North Sea oil and gas revenues to fund the Acorn carbon capture project, after Chancellor John Healey changed a £200 million grant commitment in the Budget.
The Scottish National Party has called on the UK Government to use £5bn of North Sea oil and gas revenues to fund the Acorn carbon capture and storage project in Scotland. The demand follows a change to the Budget that removed a £200 million grant commitment the project had been expecting from Westminster.
Acorn was due to receive £200 million in grant funding from the UK Government. Chancellor John Healey altered that commitment in the Budget, leaving the scheme's financing in doubt. The SNP argues that the revenues generated by oil and gas extraction offshore should be directed towards carbon capture infrastructure that would help decarbonise industry and extend the economic life of the North-East's energy skills base.
The party's position puts the Acorn project at the centre of a wider dispute over how the Treasury balances North Sea taxation, energy transition spending and regional investment. Scottish ministers and industry stakeholders have pressed for certainty on capital funding for carbon capture, which is widely seen as a central piece of the UK's climate and industrial strategy. The SNP's call frames the revision as a decision that weakens Scotland's bid to lead on the technology while the oil and gas sector continues to generate substantial tax receipts.
Carbon capture and storage involves trapping carbon dioxide emissions from industrial sites and burying them deep underground, typically in depleted offshore reservoirs. Acorn is designed to use existing infrastructure in the North Sea to transport and store captured emissions, a feature proponents say reduces cost and development time. Supporters argue that without public backing at the early stage, private investors are unlikely to commit the capital needed for projects of this scale.
The SNP's proposal would effectively redirect a portion of the tax take from the hydrocarbon sector into low-carbon projects. Critics of that approach argue it blurs the line between general public spending and ring-fenced fossil fuel revenues, and that any grant allocation must be weighed against competing demands on the Budget. The Treasury has not, in the material available, set out a full response to the SNP's request.
The row underlines the political stakes of the Budget for Scotland, where energy policy and jobs in the North Sea remain closely watched. Whether Westminster restores or reshapes the Acorn funding will be a key test of how the UK Government intends to support carbon capture as it seeks to meet its net zero commitments.
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