The developer behind controversial plans for the UK’s first underground coal gasification (UCG) plant in Fife has pulled funding for the project.
Cluff Natural Resources (CLNR) had hoped to produce electricity through a complex operation involving the burning of untapped coal seams under the Forth at Kincardine.
However, the company confirmed it had stopped putting cash into the scheme and instead switched its focus south of the border where it said the political climate was more open to UCG.
In September, Cluff claimed the project had the potential to generate more than £600 million for the Fife economy and create hundreds of jobs.
However, the scheme proved hugely controversial with environmental campaigners, who lobbied for UCG and other methods of onshore unconventional oil and gas extraction, including fracking, to be banned in Scotland.
The Scottish Government’s response was to order moratoria on the development of a range of unconventional technologies while further research on their potential impacts is carried out.
Cluff confirmed its new strategy in a Stock Exchange announcement.
“The company has moved its primary focus from its Underground Coal Gasification assets, in particular the development of its Kincardine Project in Scotland, to developing its portfolio of five conventional oil and gas licences in the Southern North Sea,” the firm said.
“This was precipitated by the introduction of a moratorium on UCG in Scotland in October 2015 despite previous assurances the company had received from the Scottish Government.”
It continued: “While the company is confident the evidence in relation to UCG will result in the moratorium being lifted, it has stopped all expenditure related to the Kincardine Project and is now focusing its attention outside of Scotland.”
WWF Scotland director Lang Banks said: “Burning coal under the sea should have no place in Scotland’s energy future, which is why the Scottish Government was right to extend its moratorium on unconventional gas extraction to include underground coal gasification. We hope in time this moratorium will become an outright ban.”
Mid Scotland and Fife MSP Claire Baker added: “I am reassured that Fife will no longer be the guinea pig for this largely untested process.
“However the Scottish Government still has questions to answer over what assurances it made in private to Cluff and other fracking firms.”
Shares in Cluff closed down 0.45 at 2.80 on Thursday.