The UK Government has confirmed £21.7bn funding for carbon capture utilisation and storage (CCUS) and blue hydrogen over 25 years in a major policy fillip for both sectors.
In the week in which the UK ended its 150-year use of coal to produce power, the nation now begins ‘a new era of clean energy technology’ with the approval of the East Coast Cluster and HyNet projects in Teesside and north Wales respectively.
The UK Government claims it has enough capacity to store 200 years’ worth of emissions, making CCUS a key instrument in tackling the climate crisis and industrial decarbonisation.
Louise Kingham, SVP Europe and head of country, UK for bp, said, “Major projects like these have the potential to help stimulate economic growth – supporting thousands of jobs, helping UK companies prosper through the vast supply chains involved and creating the infrastructure to help major industrial companies with their decarbonisation plans.”
The UK will continue to be a key market for Equinor, which recently cancelled a hydrogen pipeline project linking Norway and Germany. Alex Grant, SVP and Head of country, UK, agreed it will help decarbonise the country’s industrial heartlands and achieve its Net Zero ambitions while providing jobs and value creation.
The Carbon Capture and Storage Association (CCSA) welcomed the decision, saying it can now ‘futureproof’ key British industries such as cement, chemicals and other manufacturing sectors, which are critical to the UK’s clean industrial growth. Alongside creating 70,000 new skilled jobs it will protect 77,000 jobs in critical industries.
The Climate Change Committee has set a target of 20-30 million tonnes (Mt) of CO2 captured and stored by 2030, rising to 50-60 Mt by 2035.
Source: CCSA
Olivia Powis, CEO at the CCSA, said, “The Government’s confirmed support for carbon capture and storage and low-carbon hydrogen demonstrates their commitment to the UK’s journey to Net Zero. Today’s announcement shows that decarbonisation does not mean de-industrialisation, and highlights the UK’s leadership in these important technologies.”
David Parkin, Chair of the HyNet Alliance, said HyNet was formed to meet the demands of industry wanting to decarbonise to deliver sustainable products and compete in the global low carbon economy.
“We need to decarbonise, not by de-industrialising, but by investing in the industries that we rely on for the every day products in our lives – from the glass bottles we use for our food and drink to the cement we use to build roads and buildings,” he said.
“Government’s commitment to HyNet will also enable generation of resilient low carbon power, right here in the industrial North West and North Wales, supporting its Clean Power 2030 Mission. This will create new roles and safeguard existing jobs, attracting investment and catalysing growth.”
Chris Daykin, General Manager, Northern Endurance Partnership, said as the CO2 transportation and storage infrastructure provider to the East Coast Cluster, it has a crucial role to play in the decarbonisation of Teesside and the Humber.
“Construction will commence once all statutory processes are complete and financial close is achieved.”
Stable policy essential for growth
Eni CEO, Claudio Descalzi, said the commitment is clear evidence of how governments and industry can work together to implement pragmatic and effective industrial policies, in order to accelerate decarbonisation.
“Today’s news is an important step towards the creation of a new business chain linked to the energy transition,” he said.
Aniruddha Sharma, Chair and CEO of Carbon Clean, welcomed the news, particularly within Labour’s first 100 days in office.
“It’s the positive signal the country’s highly innovative CCS sector needs,” he said.
“A stable, predictable policy framework is an essential building block for growth. Industrial decarbonisation is a powerful lever to turbocharge the economy and create thousands of jobs. Key to this are incentives that crowd-in private sector funding for pioneering first-of-a-kind (FOAK) projects that accelerate the commercialisation of highly innovative technologies, such as CCS.”
Government initiatives that strengthen local supply chains and establish UK-based manufacturing facilities are also needed so that homegrown technology can be exported globally, he added.
“The clean energy transition must be viewed as a catalyst for economic transition. The opportunity is huge and with the right support, the UK is well positioned to lead.”
Neil McCulloch, CEO of Spirit Energy, said CCS is key to delivering the Government’s guiding mission to deliver clean energy by 2030 and to deliver the Net Zero 2050 goals.
“It offers a vital lifeline to the hard-to-abate industries that so many UK jobs and livelihoods rely on, and today’s announcement represents a vote of confidence in not only CCS, but the industrial heartlands that stand to benefit from the technology,” he said.
Following progress on Track-1, the Government must now create a pathway for other mature CCS projects, such as its plans to create a billion tonnes of carbon storage in the depleted gas fields at Morecambe Bay, decarbonising 40% of the UK’s cement and lime industry, he added.
“It’s only by unlocking further private investment that the Government deliver growth, clean energy and a bright future for the UK’s industrial heartlands; without the need for significant upfront taxpayer money.”
Alex Vaughan, CEO at Costain Group, which is working with bp and Net Zero Teesside to deliver the onshore pipeline system for carbon capture, as well as supporting them to design an overlaying network for hydrogen, hailed the government’s decision as ‘momentous’ and a crucial, bold step.
“But there’s something of a paradox here,” he notes. “At the same time as solving many of the UK’s climate change challenges, the infrastructure industry is also one of the largest contributors to carbon emissions. The embodied carbon in the core materials used for infrastructure projects, like steel, concrete and aggregates, is considerable. Low-carbon alternatives are either not viable or simply don’t exist yet, certainly not at the scale required.”
“Decarbonising infrastructure demands innovation, collaboration and working with government and regulators to reshape policies that will enable the UK to build a more sustainable future. It requires a whole-system approach, and it must also be done in a way that fuels economic growth, creates jobs for the long term and addresses skills shortages across the country.”
