UK sets aside almost £22B for carbon capture and storage, hydrogen projects

The UK government has confirmed £21.7 billion in funding to establish two major carbon capture and storage (CCUS) clusters over the next 25 years, alongside hydrogen production facilities, in Teesside and Merseyside. 

According to the UK government, this move will propel the UK towards becoming a global leader in CCUS and hydrogen technology while reinforcing efforts to meet net-zero emissions by 2050.

The funding, targeted at two clusters in Teesside and Merseyside, is expected to drive an influx of around £8 billion in private investment, generate 4,000 direct jobs, and support 50,000 long-term jobs as the sector matures, boosting the economies of the North West and North East of England.

The projects, focused on carbon capture and hydrogen production enabled by CCUS technologies, aim to cut over 8.5 million tonnes of carbon emissions annually, equivalent to taking 4 million cars off the road. 

By capturing CO2 emissions before they reach the atmosphere and storing them beneath the seabed, using proven and tested technology that has been deployed globally for over 20 years, these clusters are set to reshape the energy sector while cutting emissions, said the UK government. 

UK’s Prime Minister, Keir Starmer, said: “We’re reigniting our industrial heartlands by investing in the industry of the future. For the past 14 years, business has been second-guessing a dysfunctional government – which has set us back and caused an economic slump. Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this groundbreaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all”

With Britain already having ceased its 150-year reliance on coal, the focus now shifts to technologies like CCUS and hydrogen to decarbonize heavy industry, including cement and steel production. The initiative is expected to add £5 billion annually to the economy by 2050.

“On Monday, 150 years of coal in this country came to an end. Today, a new era begins. By securing this funding, we pave the way for securing the clean energy revolution that will rebuild Britain’s industrial heartlands,” commented the UK’s Energy Secretary, Ed Miliband.

“I was proud to kickstart the industry in 2009, and I am even prouder today to turn it into reality. This funding is a testament to the power of an active government working in partnership with businesses to deliver good jobs for our communities.”

The government’s partnership with private investors is said to be designed to accelerate innovation and secure long-term economic stability, keeping the UK at the forefront of clean energy technology.

Chancellor of the Exchequer, Rachel Reeves, noted: “This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside, igniting growth in these industrial heartlands and powering up the rest of the country. Working in partnership with business is at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off.”

According to the UK government, as part of the partnership with GB Energy and The Crown Estate, the progress on Track-1 comes as The Crown Estate awarded an agreement for lease to Eni, an Italian energy giant, to repurpose existing infrastructure to transport and store CO2, reducing cost and environmental impact. 

The energy giant believes that CCS will play a crucial role in the energy transition and sees itself as a key partner in the UK’s transition journey, where it is present across the entire energy value chain. 

Claudio Descalzi, CEO of Eni, noted: “This commitment is clear evidence of how governments and industry can work together to implement pragmatic and effective industrial policies, in order to accelerate decarbonisation. On our side, it reaffirms Eni’s role as a key partner with the UK in enabling its journey towards Net Zero.”