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Campaigners said the party should walk back its calls for the money from oil and gas revenues to be funnelled into the Acorn project in Aberdeenshire, which aims to take carbon emissions and store them 2.5 kilometres below the floor of the North Sea.
Friends of the Earth Scotland raised concerns that the Scottish Government’s climate change plan from March said that costs of carbon capture projects like Acorn “are expected to fall on government, as there is no financial motive for the private sector to invest” at the moment.
Caroline Rance, the pressure group’s head of campaigns, told The National “Carbon capture has failed everywhere it has been tried at scale and the Acorn project is in serious trouble with both its lead developer and the UK Government both getting cold feet.”
It comes after Labour announced it was converting the vast majority of the £200 million in grants previously awarded to the project into loans and equity stakes, which ministers have defended on the grounds of seeking returns for the taxpayer.
Rance added: “The public will question the judgement of Scottish politicians who want to write a blank cheque for fossil fuel greenwash. Acorn hasn't captured a gram of carbon and is being used an excuse for prolonging gas burning; it is losing support fast.
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“Acorn should not get a penny of public money when one of its owners is posting such obscene profits. It would take Shell a couple of days to earn the £200m that the public was being expected to cough up. It shows how little faith that Shell have in this pipe dream that they won't put in any more of its own money.
“Public investment is a crucial way we can drive forward climate action but that money should go to credible projects that will deliver wider public benefits. Climate solutions like insulating homes and improving bus services can help tackle poverty, cut people’s bills and create green jobs.”
Shell are among the project’s commercial backers, which also include Harbour Energy and North Sea Midstream Partners.
Storegga, the project’s lead developer, announced it planned to sell its stake in December 2025 and has so far been unable to find a buyer.
Carbon capture is a contentious topic and met with scepticism from some environmentalists.
However the Global Carbon Capture and Storage Institute, which represents the industry, said that since the Sleipner project began off the Norwegian coast in 1996 “over 400m tonnes of CO2 have been permanently stored underground”.
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In its 2025 report, however, the institute acknowledged that even with a potential total storage capacity of 100 million tonnes per year, “we are still far from the gigatonnes per annum” needed, which it is predicted would also require technology which pulls carbon emissions out from the atmosphere, needed to reach net zero.
Energy Minister Stephen Gethins said: “We are already seeing carbon capture, utilisation and storage (CCUS) deployed elsewhere in Europe by our neighbours in Norway and Denmark reducing emissions whilst delivering jobs and investment.
“Acorn is a nationally significant project that is key to decarbonising Scotland’s important industries and will unlock economic opportunities for people across Scotland as part of the energy transition. The Scottish Government will continue to do all that we can within devolved powers to support its development.
“It is deeply regrettable that the UK Government’s Budget caused confusion and uncertainty about the project. Scotland’s energy is sending billions in additional revenue to the Treasury and the UK Government should commit to using that revenue to invest in renewables and low carbon technologies, which could support thousands of jobs.
“The UK is one of the only states to have discovered significant oil and gas but not to have created a future generations fund, making a long-term benefit out of a finite resource and ensuring that we have the appropriate resources to meet the challenges of the transition.”
A Storegga spokesperson said: “Storegga's interest in Acorn is subject to ongoing commercially sensitive discussions, so we're not in a position to comment further at this stage.
“We remain confident in Acorn's potential to support industrial decarbonisation in Scotland and the wider UK, and in the economic opportunities unlocked through the development of a commercially viable CO2 transport and storage business, including new investment, jobs and economic growth.”
A UK Government spokesperson said: “We recognise Acorn’s role in supporting good, well-paid jobs and reindustrialisation in Scotland.
“We are delivering the first ever industrial scale carbon capture projects in the UK, supporting thousands of jobs across the country and reigniting our industrial heartlands.
“An equity style investment would also allow for a closer partnership between the government and Acorn, allowing us to drive a better outcome for taxpayers and the project.”
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