Two UK carbon capture and storage projects selected for state funding

The UK government has selected two clusters, led by energy majors, to receive the funding and develop their proposed carbon capture usage and storage projects starting from 2025.

Carbon Capture, Usage and Storage, or CCUS, will be essential to meeting UK’s net-zero ambitions. The UK Prime Minister’s 10 Point Plan established a commitment to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest. The goal is to use CCUS technology to capture and store 20-30 MtCO2 per year by 2030.

Earlier this year, the government launched a process to determine the sequence in which it would support the decarbonisation of regional industry clusters across the UK, placing the clusters in two tracks. Track 1 would start decarbonising the industry from 2025 and Track 2 would start from around 2030.

The government’s cluster sequencing process, which has, through the CCS Infrastructure Fund, £1 billion ($1.4 billion) to provide the industry with the certainty required to deploy CCUS at pace and at scale, has completed the first phase of the evaluation of the five cluster submissions received.

The East Coast Cluster (ECC) and HyNet have now been named as the UK’s first two carbon capture, usage and storage clusters following a successful bid to the Department for Business, Energy & Industrial Strategy (BEIS). They will now be taken forward into Track 1 negotiations.

Greg Hands, Minister of State for Energy, Clean Growth & Climate Change, said: “If the clusters represent value for money for the consumer and the taxpayer then subject to final decisions of Ministers, they will receive support under the government’s CCUS Programme.”

The minister also stated that the Scottish Cluster was selected as a reserve cluster if a backup is needed. This reserve cluster meets the eligibility criteria and performed to a good standard against the evaluation criteria. As such, the government will continue to engage with the Scottish Cluster throughout Phase-2 of the sequencing process, to ensure it can continue its development and planning. This means that if the government chooses to discontinue engagement with a cluster in Track 1, it can engage with this reserve cluster instead.

Both the East Coast Cluster and HyNet were named as Track 1, putting them on course for deployment by the mid-2020s. Announcing the government decision on Tuesday, HyNet confirmed it will proceed with decarbonising the North West and North Wales from 2025.

David Parkin, HyNet Project Director, said: “HyNet is led by the demand from organisations and stakeholders across the North West of England and North Wales, who all want to reduce carbon emissions to net-zero. From as soon as 2025, the project will enable our manufacturing sector across the region to decarbonise, as well as providing the opportunity to transition the way we travel and how we heat our homes.”

Italy’s energy major Eni, Essar, Progressive Energy, Cadent, and Intergen are some of the HyNet project’s partners.

The East Coast Cluster is enabled by the Northern Endurance Partnership – a collaboration between BP, Eni, Equinor, National Grid, Shell and Total, with BP leading as the operator.

The ECC bid, led by the Northern Endurance Partnership, is a major step towards achieving the UK government’s ambition to establish the first ‘net-zero’ carbon industrial cluster in the UK by 2040. It also represents a significant boost for the industrial heartlands of Teesside and the Humber.

According to its partners, the East Coast Cluster will be vital for supporting low-carbon industry and power projects across the region, including those in Net Zero Teesside and Zero Carbon Humber, two of the country’s industrial decarbonisation proposals. Once operational, the cluster has the potential to transport and securely store nearly 50 per cent of all UK industrial cluster CO2 emissions – up to 27 million tonnes of CO2 emissions a year by 2030.

The project aims to create and support an average of 25,000 jobs per year between 2023 and 2050, with approximately 41,000 jobs at the project’s peak in 2026. These skilled jobs in new industries include industrial carbon capture, low-carbon hydrogen production, negative emissions power, and power with carbon capture.

Andy Lane, MD of Northern Endurance Partnership, said: “We are delighted that the East Coast Cluster has been selected and we will look forward to delivering our project, removing up to 50 per cent of the UK’s industrial cluster CO2 emissions, creating tens of thousands of jobs and establishing the UK as a leader in the energy transition”.

Louise Kingham, senior vice president, Europe & head of country, UK at BP said: “The East Coast Cluster can play a critical role in the UK Government’s levelling up ambition, supporting thousands of jobs and investing in local communities. Teesside and the Humber were once the industrial heart of the UK. Today’s announcement paves the way for them to become the green heart of the country’s energy transition, shepherding in the next generation of industry and ways of working.”