UK publishes a “blueprint” for becoming a carbon capture leader

THE UK government’s CCUS Vision is a “blueprint to deliver a world-leading UK carbon capture industry” said Lord Callanan, minister for energy efficiency and green finance. Marking a “pivotal milestone” in the UK’s journey to net zero, the plan aims to make the UK a competitive market in CCUS by 2035, to drive growth, unlock investment, and create tens of thousands of jobs.

Organisations including the UK Climate Change Committee and the International Energy Agency have highlighted that CCUS is not only key to national decarbonisation goals, but also critical to the world achieving a transition to net zero.

Claire Coutinho, secretary of state for energy security and net zero, said: “Thanks to the UK’s geology, skills, and infrastructure, we are in a unique position to lead the way on carbon capture technologies. That is why we’re making one of the biggest funding commitments in Europe on carbon capture.”

The CCUS Vision is the nation’s latest step towards developing CCUS technologies. It came as the government launched a process to expand the HyNet CCUS cluster under development in the North West and Wales. The government is backing early development of CCUS with £20bn of previously announced investment, which is expected to support up to 50,000 jobs and help capture 20–30m t/y of CO2 by 2030.

Hedvig Ljungerud, NSTA director of strategy, said: “The energy transition and the path to net zero cannot succeed without carbon storage. As the regulator, we welcome today’s announcement and look forward to supporting this growing industry as it benefits the UK’s economy and the fight against climate change.”

Mike Tholen, sustainability and policy director for the trade body Offshore Energies UK, said: “We end 2023 with a vision of where we want to go, a plan for how to get there, and projects already in motion which could create 50,000 UK jobs in the coming years.

“The UK is on the brink of a transformation that will allow us to provide carbon capture and storage facilities to industry here and to help our European neighbours. This is good news for tackling climate change and for boosting the UK economy.”

A vision for CCUS

Carbon Capture, Usage and Storage: a vision to establish a competitive market sets out how the UK will transition from early projects backed by government support, to become a competitive market in the area by 2035 – with an annual capture capacity of at least 50m t/y by then. In this vision, UK companies will compete to build carbon capture facilities and sell services around the world.

The plan is expected to boost the economy by £5bn (US$6.4bn) a year by 2050.

Measures outlined for reaching the government’s 2035 goal include moving to a competitive allocation process for carbon capture projects from 2027 to accelerate buildup of the UK’s CCUS sector. The government will launch a consultation in 2024 on the design of an enhanced competitive allocation process for carbon capture contracts.

Another planned measure is to create the conditions for projects that cannot transport CO2 by pipeline to enter the market from 2025 onwards, using other forms of transport such as ship, road, and rail. Next year, the government will publish a call for evidence on how it envisages delivery of non-pipeline storage in the UK. 

The report also says that the government will work to develop increasingly streamlined leasing, licensing, and permitting across regulatory bodies to support the pace and scale of carbon storage appraisal required. In September, the North Sea Transition Authority (NSTA) announced 21 winners of the first ever UK carbon storage licensing round.

Further measures include establishing a working group led by industry to identify and adopt solutions to reduce the cost of capturing CO2, and publishing a Green Jobs Plan, a roadmap for delivering a skilled and sufficiently sized workforce.

Ruth Herbert, CEO of the Carbon Capture and Storage Association, also welcomed the CCUS Vision, adding that it was “great to see CO2 transport by ship, road and rail will be enabled from 2025 onwards, which will also support longer-term cross-border CO2 transport solutions”. However, she highlighted that carbon capture project developers will only be glad for the UK’s commitment to allocation rounds from 2027 if they are of “sufficient frequency and volume to unlock continued investment”.

Cluster progress

Other big CCUS announcements for the UK this year have included the selection of the Acorn project in Scotland and Viking in the Humber as the UK’s third and fourth CCUS clusters. HyNet in the North West and the East Coast Cluster in Teesside and the Humber were selected in 2021. The UK expects the four clusters will build integrated energy hubs that make the best use of the UK’s established infrastructure and play a key role in the country’s “measured, pragmatic” approach to achieving net zero.

After shortlisting projects to connect with HyNet and the East Coast Cluster last year, it is now open to applications for further CCUS projects looking to connect to HyNet by 2030.

Luis Vasques, managing director of Eni UK, a partner in HyNet, said: “We see strong demand from businesses across the UK for CCS so today’s announcement is a welcome step forward. We look forward to providing transportation and storage at HyNet for a wider range of companies in North West England and North Wales, helping them to reduce CO2 emissions, protect local jobs, and boosting industrial competitiveness for the region.”

The government said that “in due course” the process would be developed to support expansion of the East Coast Cluster. To pave the way for this expansion, the government has agreed initial commercial terms with the Northern Endurance Partnership (NEP), a collaborator in the East Coast Cluster. The government will consider the best time to launch an expansion process from 2024 based on an assessment of store readiness in 2024.

The government also plans to accelerate the development process for the third and fourth clusters by learning from its experience with the first and second.

Gustavo Baquero, executive VP of strategy, business development and energy transition, at Harbour Energy, which is leading the Viking project said: “It is important that momentum is maintained and the selection of the anchor emitters to individual clusters are assigned as quickly as possible, which will enable businesses like Harbour to make vital investment decisions to help enable the UK to meet its legally binding emissions reduction targets.”

Alongside the CCUS news, the UK government announced updates to business models for greenhouse gas removals and power BECCS (bioenergy and carbon capture and storage).