UK confirms £800m for carbon capture clusters

THE UK has confirmed in its budget today that it will invest £800m (US$1bn) in a carbon capture and storage (CCS) infrastructure fund as it seeks to establish CCS clusters in two sites by 2030.

With the UK set to host the COP26 UN Climate Summit later this year, the Government pitched its budget as an effort to decarbonise the economy and take a lead on green technology.

Discussing the £800m in funding for CCS clusters, which was first announced in December last year, Chancellor Rishi Sunak said: “Carbon capture and storage is precisely the kind of exciting technology where Britain can lead the world over the next decade.”

The plan is to establish one cluster by the middle of this decade and a second by 2030.

“Once up and running, these clusters will store millions of tons of carbon dioxide that would otherwise be released into the atmosphere. The new clusters will create up to 6,000 high-skill, high-wage, low-carbon jobs in areas like Teesside, Humberside, Merseyside or St Fergus in Scotland.”

Luke Warren, CEO of the Carbon Capture Storage Association (CCSA), welcomed the announcement, describing it as a significant step forward.

“We look forward to working with the Government…on the detail of how these funds can be used to ensure that CCS is deployed in multiple industrial regions in the 2020s, helping to support their transition to a net zero economy and creating the low carbon sectors of the future.”

Among the regions vying to host a CCS cluster, industry majors lobbied Government last year to support development of a net-zero hub in the UK Humber region that would use CCS technology and hydrogen. Last month BP was among a number of industry majors that said they will lead the development of the Net Zero Teesside project, which expands on plans announced in 2018 to develop the world’s first gas-powered energy plant with full-chain CCS. It said with the right Government support, the network could develop a zero carbon cluster in Teesside that would begin in the mid-2020s to gather carbon dioxide from industry sources across the region and store them under the North Sea.

The Government has also announced that it will use consumer subsidies to support the construction of the UK’s first CCS power plant, though has provided no further details on whether this is related to the Teesside proposal.

The support follows the announcement last month by the UK’s Department for Business, Energy and Industrial Strategy (BEIS) that it had awarded £90m to help decarbonise homes and industry, including funding for five demonstration-phase hydrogen projects.

Other environmentally-focussed initiatives include support schemes for biomethane, heat pumps and biomass boilers to help decarbonise heating. This includes providing £270m for heat networks to adopt low-carbon heat sources.

It will also include a plastic packaging tax to encourage producers to make their packaging more recyclable.

In support of technology development, the budget includes a pledge of £900m in “high-potential technology” including nuclear fusion; £22m to support innovation in the steel and metals sector through the Materials Processing Institute; and £800 for a new high-risk research agency for “blue-skies research”.

Jim McDonald, President of the Royal Academy of Engineering, said: “Radical, out-of-the-box thinking, if properly funded and executed, could boost local economies, create new and sustainable jobs and address global challenges, while creating new opportunities to improve people’s lives in every part of the UK.”