Viking and Acorn picked as two new clusters to expand UK’s carbon capture and storage industry

As part of its cluster sequencing process, the UK government has selected two carbon capture and storage (CCS) projects to establish two new clusters through the Track 2 process, which are expected to further enrich the development of Britain’s carbon capture, usage, and storage (CCUS) industry. These two clusters, which are part of Track 2 are expected to be up and running by 2030.

The UK government believes that CCUS will be essential to meeting its net-zero ambitions. Therefore, Britain aims to deploy CCUS in a minimum of two industrial clusters by the mid-2020s, and four by 2030 at the latest to capture and store 20-30 MtCO2 per year by 2030. In line with these plans, the government launched a process in 2021 to determine the sequence in which it would support the decarbonisation of regional industry clusters across the UK, placing the clusters in two tracks.

The government’s cluster sequencing process, which has, through the CCS Infrastructure Fund, £1 billion to provide the industry with the certainty required to deploy CCUS at pace and at scale, completed the first phase of the evaluation of the five cluster submissions received in October 2021. As a result, the UK set its cap on establishing two industrial clusters by the middle of this decade –  the HyNet and East Coast clusters in the North West, and North East of England – to form what it is calling Track 1.

These Track 1 clusters are expected to be expanded to include Humber later in the year, while Britain also plans to develop a further two clusters as part of Track 2 by 2030. The UK’s up to £20 billion funding for early deployment of CCUS is expected to help the nation meet climate commitments. 

At the end of March 2023, the UK’s Department for Energy Security and Net Zero launched a four-week expression of interest (EoI) process for transport and storage (T&S) systems that met the eligibility criteria set out in the CCUS Track 2 guidance document. Following a review of EoI applications against the Track 2 eligibility criteria, the government has concluded that Acorn and Viking CCS projects, due to their maturity, remain best placed to deliver the UK’s objectives for Track 2.

“We will therefore commence engagement, assessment of delivery plans, and due diligence with Acorn and Viking T&S systems. The government will set out the process by which capture projects for Track 2 will be selected to meet the stated ambitions in due course. We also reserve the right to re-engage with T&S systems that submitted an EoI should any significant delivery challenges arise with Acorn and Viking T&S systems,” outlined the UK government.

According to the UK government, this decision is in line with the Review of Net Zero chaired by Chris Skidmore MP, which included a recommendation that government should take a pragmatic approach to cluster selection by allowing the most advanced clusters to progress more quickly. Acorn also retains its status as a Track 1 reserve cluster while the government reserves the right to enter into accelerated negotiations with Acorn in the event that one of the named Track 1 clusters encounters significant delivery challenges.

Acorn is a joint venture with four partner companies – Storegga, Shell UK, Harbour Energy, and North Sea Midstream Partners – developing decarbonisation projects in Scotland. This CCS project is described as a catalyst for industrial decarbonisation in Scotland, providing the critical infrastructure for the decarbonisation of the Scottish Cluster, which is a collection of industrial, power, and hydrogen businesses in the Central Belt and North East Scotland that will capture their CO₂ emissions and then move them permanently into the Acorn CCS geological stores, deep under the North Sea.

“We recognise the importance of providing further certainty for industry and we will work with other T&S systems on future opportunities through the government’s CCUS programme. Later this year, we will publish a vision for the UK CCUS sector, setting out how CCUS will support our net-zero ambitions, to raise confidence and improve visibility for investors,” added the UK government.

Harbour Energy, which acts as the operator of the Humber-based Viking CO₂ transportation and storage network and partner in the Acorn CCS project in northeast Scotland, has welcomed the news that both projects have been awarded Track 2 status. The company believes that this marks “an important milestone” for these two projects, allowing them to move into front-end engineering and design (FEED) and discussions with the government over the terms of the economic licences, ahead of final investment decisions (FIDs).

Linda Z Cook, CEO of Harbour Energy, commented: “Today’s announcement is an important step forward for Harbour’s Viking and Acorn CCS projects and the development of the carbon capture and storage industry in the UK. It is also a further demonstration of the key role that the oil and gas sector is playing by using our existing infrastructure, skills, and experience to build this new industry and help deliver the energy transition.

“Viking has the potential to be transformational for the Humber, the UK’s most carbon-intensive industrial region, creating thousands of jobs in the area and playing a vital role in supporting the UK to meet its target to capture 30 million tonnes of CO₂ annually by 2030.”

Harbour has a 60 per cent stake in the Viking CO₂ transportation and storage network while BP holds the remaining a 40 per cent non-operated share. The two players already share an interest in the Lincolnshire Offshore Gas Gathering System (LOGGS) pipeline, which is intended to be repurposed as part of the project to connect customers to the depleted Viking gas fields, which recently had their 300 million tonnes of CO₂ storage capacity independently verified.

Harbour Energy secured the CO2 appraisal and storage license for the Viking project in October 2021. Recently, the firm entered into an exclusive commercial relationship with the Associated British Ports for the development of a CO2 import terminal at the Port of Immingham, the UK’s largest port by tonnage.

The firm already put the wheels into motion to showcase the potential of the Viking CCS project by establishing a partnership with RWE to investigate options to capture, transport and store CO2 from RWE’s gas-fired power stations via the Viking CCS project. Due to this, RWE joins Phillips 66, VPI and West Burton Energy as Viking CCS’ capture project partners.

The Viking CCS project – previously known as V Net Zero – which is located close to the heavily industrialised Humber region, has the potential to transport and store up to 10 million tonnes of CO₂ annually by 2030 and 15 million tonnes of CO₂ annually by 2035.

The project could be transformational for the Humber region, potentially unlocking up to £7 billion of investment across the full CO₂ capture, transport, and storage value chain between 2025 and 2035, creating over 10,000 jobs during construction and providing an estimated £4 billion of gross value add (GVA) to the Humber and its surrounding areas.

Additionally, the Viking CCS project can enable, through work with Associated British Ports at the Port of Immingham, the potential for shipped CO₂ from dispersed emitters elsewhere in the UK and internationally to be transported for permanent storage within the Viking fields, creating a new industry for the UK.

A final investment decision for the Viking CCS project is expected in 2024 and the project could be operational as early as 2027.