BOLD plans to make Teesside a global centre for clean air technology have not been torpedoed by George Osborne’s decision to axe carbon capture funding, business leaders told The Northern Echo.

“It is business as usual for the Teesside Collective plan,” said Neil Kenley, director of business investment at Tees Valley Unlimited, who is helping to develop plans for a shared industrial CCS network to capture noxious gasses produces by Tees heavy industry.

Labour MP for Redcar, Anna Turley, and Middlesbrough South and East Cleveland, Tom Blenkinsop, have expressed alarm, however, after the government this week cancelled a pioneering £1 billion carbon capture and storage (CCS) competition threatens support for the technology on Teesside.

They fear it shows the Government is backtracking on its manifesto pledge to support green technology.

Shell said the decision means it will now focus investment in the technology abroad.

Teesside Collective, made up of leading chemicals firms such as Lotte, GrowHow, BOC and Sembcorp Utilities UK, has been preparing its own case for developing CCS technology to create Europe’s first CCS-equipped industrial zone on Teesside.

The Tees MPs wrote to the Chancellor ahead of the spending review to ask that the government to step up its support for the project.

Responding to the cancellation of the £1 billion funding, Ms Turley, said: “This announcement is very worrying and shows a lack of government confidence in carbon capture and storage technology. The Teesside Collective project is crucial for the local economy after the trauma we have felt from the closure of the steelworks and the job losses at Boulby Potash Mine. It will provide security for our remaining local industries as well as bringing new jobs and investment.

“The government need to step up and get behind the technology so that investors interested in backing the Teesside project have the confidence that the government is behind them. It is very disappointing that they are unwilling to do this and I fear it will mean the Teesside project will not get off the ground. Once again, local industry is being let down by the laissez-faire attitude of the government.”

Mr Blenkinsop added: “Carbon capture storage was a key manifesto pledge in the Tories 2015 manifesto and now just six months after the election can be added to the growing list of broken promises

“CCS could become a thriving local industry and provide hundreds of jobs for Teesside but the government must, at least in the early stages, support the industry. There is a real risk that the UK will be left behind on this technology and other countries, which are willing to invest in the sector, will reap the rewards of jobs and a reduction in their carbon output.

“The cutting of this funding has further added to the crisis caused by this government’s lack of industrial strategy. In 2010 Osbourne promised to rebalance the economy, instead he has helped cause an industrial meltdown on Teesside which will not be improved by removing £1 billion in a technology that could help regenerate the area.”

Teesside Collective say their scheme, which includes building a pipeline would help to boost competitiveness among the region’s heavy energy users and safeguard up to 5,900 jobs.

The longer term ambition could see 15 million tonnes of CO2 a year stored and 2,600 jobs created across Tees Valley over the next 15 to 20 years.

PANEL: CCS aims to capture and store CO2 emissions from coal-fired power plants and heavy industry before they enter the atmosphere. Projects across the world are looking at ways to develop viable, cost-effective CCS. Critics say it is too expensive to develop it commercially.