Edinburgh Summit to see release of new action plan designed to deliver UK's first major CCUS project by the mid-2020s
Just over three years to the day after it controversially axed plans for a £1bn carbon capture and storage (CCS) demonstration project, the government will today unveil new plans to deliver the UK's first major carbon capture project by the mid-2020s.
Energy and Clean Growth Minister Claire Perry is set to attend an international CCS summit in Edinburgh later today, where she will officially launch the government's new carbon capture usage and storage (CCUS) action plan.
At the heart of the plan is the news that the government will next year set out how to develop the UK's first CCUS facility with a view to it being online by the mid-2020s.
The plan also includes fresh commitments to invest £20m in supporting the construction of CCUS technologies at industrial sites across the UK; earmark £315m for projects that decarbonise industrial sites, including potential CCUS infrastructure; and start work with the Oil and Gas Authority, industry, the Crown Estate, and Crown Estate Scotland to identify existing oil and gas infrastructure which could be transformed for CCUS projects.
The proposals will be unveiled alongside confirmation the UK government is to invest £175,000 in the Project Acorn initiative in St Fergus, Scotland, which is developing ways of transporting carbon emissions from where they are captured to storage. The funding will be matched by the Scottish Government while the European Commission will also provide funding.
Separately, OGCI Climate Investments - the investment coalition of a host of oil and gas majors - has also announced plans to study the development of the UK's first commercial end-to-end CCUS project in Teesside. Shell, BP, Eni, Equinor, Occidental Petroleum, and Total have formed a strategic partnership to advance the project, which will capture CO2 emitted from a gas fired power plant which will then be stored or used by industrial complexes in the area.
Meanwhile earlier this week Drax confirmed work is to start on the commissioning of a Bioenergy Carbon Capture and Storage pilot plant at its site in Yorkshire, potentially paving the way for the world's first negative emissions power station.
Today's summit is being jointly hosted by the UK government and International Energy Agency (IEA) with the new action plan set to be unveiled to an audience of more than 50 energy ministers and senior executives from across the nascent CCUS sector.
Speaking ahead of the summit Perry said the UK was "setting a world-leading ambition for developing and deploying carbon capture and storage technology to cut emissions".
"It shows how determined all countries are to unlock the potential of this game-changing technology that representatives from across the globe are gathered here today in Edinburgh," she added. "The time is now to seize this challenge to tackle climate change while kick starting an entirely new industry."
Advocates of CCS and CCUS technologies have long maintained they will prove critical to decarbonising heavy industry and enabling the development of negative emissions technologies that will be essential if global climate goals are to be met.
"Without CCUS as part of the solution, reaching our international climate goals is practically impossible," said Dr Fatih Birol, executive director at the IEA. "CCUS can also enhance energy security and boost economic prosperity. Yet up until now, progress has been muted and if this continues the challenges we face in the energy sector will become infinitely greater. That is why the IEA is bringing together industry, governments and our own technology network - as well as the investment community - to make CCUS a reality."
The new action plan was welcomed by the National Infrastructure Commission, which has previously called for more investment in CCUS infrastructure and highlighted how it can play a critical role in decarbonising heat through the production of low carbon hydrogen.
"We're pleased to see a commitment from Ministers to invest in carbon capture and storage, and to examine how this new technology could be applied to industrial sites and existing oil and gas infrastructure," said a spokesman for the Commission. "As well as these, we'd like to see the plan aligned with our recommendation to conduct a large-scale trial to explore manufacturing hydrogen with carbon capture and storage in the early 2020s, to test the viability of using this as an alternative to natural gas for the UK's heating supply. This could make a real impact in meeting our climate change targets both in the short term and long into the future."
Luke Warren, Chief Executive of the CCSA trade body, similarly welcomed the announcement as an "essential step forward for this vital industry".
"If we are to have any hope of meeting our existing climate change targets, let alone achieving net zero emissions, we must support the commercialisation of CCUS today," he said. "The government's announcement in Edinburgh recognises the need for urgent action, with a commendable commitment to develop the first project by the mid-2020s as a first step towards having the ability to deploy CCUS at scale... We look forward to working with Government over the next year on how to deliver a number of regional CCUS clusters that will be needed to achieve commercial scale deployment."
The new plan was broadly welcomed by industry groups, however, some industry insiders said more detail was needed on how the government plans to fund the first CCUS project and then support the scaling up the fledgling industry.
A report earlier this summer from a government-backed CCUS Task Force had argued the UK needed to focus on developing at least two CCUS clusters by the mid-2020s if it is to deliver the technology at the scale that is required by 2050.
"It is good the government has recognised that if you want CCUS to start scaling up in the 2030s you need the first projects in the 2020s," said one industry source. "But if this is to be the first project, when will the others come online and will they create the clusters the Task Force called for?"
There are also fears that if the government seeks to run a competition between the different projects currently planning CCUS installations in Yorkshire, Teesside, Scotland, and Lancashire then it could repeat the mistakes that led to the abandonment of the original £1bn CCS demonstration projects, inadvertently hampering the development of a number of different clusters across the UK in the process.
BusinessGreen understands the government is planning to start work with industry next year to further explore the costs, risk-sharing arrangements, and market frameworks that will be required to deliver the UK's first CCUS project.
The news comes just a day after it emerged Chair of the Business, Energy and Industrial Strategy Committee, Rachel Reeves, has written to Perry to call for clarity on the government's CCUS plans.
The correspondence notes that CCS infrastructure will only be built by the private sector with government support and expresses concern at the government's current approach, which it claims risks limiting the deployment of CCUS.
"CCUS is critical to meeting the UK's climate change targets," Reeves said in a statement. "The government has, regrettably, already performed two U-turns on their support for CCUS when it is essential that business is given more certainty on the deployment of CCUS. The government should spell out more clearly what they are going to do to support investment in this vital technology and help bring down costs. The government must explain how their policies will help drive the timely deployment of CCUS needed to help the UK meet its climate change targets. If the government is serious about CCUS it should set out what it means by "at scale" deployment and provide clarity on whether the target is the mid-2020s or the 2030s."
The government appears to have its response to Reeves ready and waiting in the form of its new strategy. But time will tell if it answers the concerns raised by both MPs and industry, or if it proves another false dawn for this most important of sectors.
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