1 What is carbon capture and storage?
It is an attempt to tackle climate change by capturing the carbon dioxide which is produced by power plants and then storing it to prevent it being released into the atmosphere. Technology for capturing CO2 is already commercially available, but storage is a relatively untried concept and as yet no power plant operates with a full CCS system.

2 What would the BP North Sea project have entailed?
The planned power station near Peterhead would convert natural gas to hydrogen and carbon dioxide then use the hydrogen as fuel. The carbon dioxide would then be pumped into the depleted BP Miller Field in the North Sea to help exploit further reserves of oil and gas. BP forecast that around 1.3 million tonnes of the greenhouse gas could be stored each year.

3 What is the potential of CCS?
The Department of Trade and Industry has estimated that two billion barrels of oil could be recovered as a result of CO2 storage in depleted oil reservoirs in the North Sea. At today's oil prices that would be worth £120bn.

4 What are the main benefits of CCS?
In his 2006 budget statement, the Chancellor announced that after a joint study between the Norwegian and UK governments, it was estimated that CCS could reduce CO2 emissions from gas and coal power stations by as much as 80%. The Peterhead project would also have brought 1000 construction jobs to the North-east.

5 What are the potential risks of CCS?
Various forms of CO2 storage have been conceived, including in former oil and gas fields and unmineable coal seams, but fears have been raised about the potential for leakage. However, the Intergovernmental Panel on Climate Change has predicted that CO2 could be safely stored for millions of years with minimal leakage.

6 How much support has the government given the project?
It has been wholeheartedly behind the project, citing it as a potentially major breakthrough in the battle against climate change. Soon after it was first announced in 2005, Gordon Brown said the government was examining how it could support the project's development. The following year Mr Brown launched the feasibility study with Norway and in March Alistair Darling confirmed a competition would be held for the right to carry out the work.

7 What have the other parties said?
The SNP has been the most vocal supporter, not least because the plant would be located in party leader Alex Salmond's constituency. Mr Salmond said CCS could "contribute significantly to reduction in greenhouse gases and Scotland has the best locations in the world for carbon capture".

8 What have environmentalists said?
After some initial scepticism, CCS has been welcomed by green campaigners for the part it can play in reducing emissions and tackling climate change. Friends of the Earth says CCS is a viable, environmentally-friendly alternative to nuclear power.

9 Why did BP pull out?
The government's energy white paper, which was published on Wednesday, revealed that the competition for Britain's CCS project would not begin until November. This was despite the fact that ministers at Westminster had promised on various occasions that a final decision on who would get the contract would be made this year. BP, which had already invested millions in the scheme, said the delays had pushed the costs of the project up and that it had no alternative but to withdraw.

10 What happens next?
BP has insisted that it is not engaging in brinkmanship and that its decision to pull out of the race for the contract is final. For its part, the government has said it had no option but to launch a competition because to award the contract without one would have been illegal. The SNP has accused Westminster of incompetence and of denying Peterhead the chance of regeneration.