Government Support for Carbon Capture and Storage Explained

Hello, Champions of Net Zero!

As we embark on the ambitious journey towards achieving Net Zero, it’s undeniable that we face a multitude of challenges. The core of this endeavour revolves around significantly reducing greenhouse gas emissions, with any remaining emissions needing to be offset by innovative solutions that actively remove these gases from our atmosphere. While planting trees is a critical aspect of this strategy, one technology stands out for its potential to deliver scalable solutions: Carbon Capture, Utilisation and Storage (CCUS). This pivotal technology is integral to the UK Government’s commitment to reaching Net Zero.

In a significant move towards a cleaner energy future, the UK recently made headlines by becoming the first G7 nation to phase out coal-fired power plants from its energy mix. This bold step was accompanied by a landmark announcement from the Government, confirming a commitment of up to £21.7 billion in funding over the next 25 years. This financial backing aims to support the development of two major CCUS sites: the East Coast Cluster on Teesside and the HyNet site located in North-West England and North Wales. Moreover, the recent Budget has allocated an impressive £3.9 billion for CCUS Track-1 projects, aimed at accelerating decarbonisation within the industrial sector and enhancing flexible power generation.

However, scaling up CCUS technology requires not only investment but also a well-defined regulatory and policy framework to cultivate a thriving market. In this article, we will delve into the role of CCUS in the UK’s energy transition, exploring its technological advancements, regulatory landscape, and the broader opportunities it presents for sustainable growth.

Understanding the Technology

Carbon Capture and Storage (CCS) encompasses a range of innovative technologies designed to either extract CO2 directly from the atmosphere—addressing historical emissions—or to capture CO2 produced from specific emission sources, such as heavy industrial processes, power generation, or hydrogen production. Once captured, the CO2 undergoes a process of compression, transportation, and secure injection into deep geological formations, including depleted oil and gas reservoirs or saline aquifers. This secure storage is essential for ensuring that the captured carbon remains safely sequestered, preventing its release back into the atmosphere.

Taking it a step further, Carbon Capture, Utilisation and Storage (CCUS) enables the captured CO2 to be repurposed as a feedstock in various applications. Although the technology behind these processes is not entirely new—commercial CO2 storage projects have been operational since the mid-1990s—the challenge lies in implementing these technologies at the scale necessary to meet Net Zero targets. While there is considerable talk of the UK becoming a global leader in the CCUS sector, this ambition hinges on sustained government support and the establishment of self-sustaining business models.

The Regulatory Framework

The recent Energy Act 2023 lays the groundwork for the economic regulation of carbon transport and storage, serving as the primary legislative framework for Industrial Carbon Capture, Greenhouse Gas Removals, and Low Carbon Hydrogen Production business models. Ofgem is anticipated to issue economic licences to carbon network operators for onshore and offshore transport and storage, pending the introduction of secondary legislation.

Furthermore, regulations enacted earlier in 2024 delineate the Secretary of State’s role in guiding carbon capture and transport entities in awarding contracts to eligible organisations. Other significant legislative measures include the Great British Energy Bill, which establishes GB Energy to co-invest in clean energy projects, and the Planning and Infrastructure Bill, aimed at reforming the planning system to expedite infrastructure delivery.

Unlocking Opportunities for Green Growth

Scaling up CCUS presents a unique opportunity to unlock green growth and facilitate the UK’s management of the Net Zero transition. According to a recent publication by Offshore Energies UK (OEUK), the CCUS sector has the potential to generate 50,000 new jobs while safeguarding an additional 100,000 roles across the UK. By successfully delivering CCUS, the UK can retain its domestic energy-intensive industries—such as steel, cement, and glass production—thereby preventing the offshoring of vital economic sectors.

Moreover, CCUS plays a critical role in enhancing the flexibility of a decarbonised electricity grid. With the UK Government setting a challenging target to decarbonise the grid by 2030, increasing investments in solar and wind generation alone will not suffice. The intermittent nature of renewable energy necessitates substantial investment in energy storage and flexible power generation solutions. The Teesside cluster exemplifies how new gas-fired power stations equipped with CCUS can effectively bridge this gap. Additionally, CCUS facilitates the upscaling of low-carbon hydrogen production, offering further options for energy storage and contributing to the decarbonisation of heavy industry.

By integrating low-carbon electricity generation, CCUS technology, and clean hydrogen production, the UK can create attractive low-carbon clusters that appeal to carbon-intensive businesses, fostering a new era of green industrial growth. The much-anticipated Green Industrial Revolution is not just a concept—it is becoming a tangible reality.

Conclusion

The journey to Net Zero is fraught with challenges, but it is also rich with opportunities for innovation and economic growth. As we continue to invest in and develop CCUS technologies, we must also advocate for supportive regulatory frameworks that enable these advancements to flourish. By doing so, we can ensure that the UK remains at the forefront of the global transition to a sustainable, low-carbon future.

As we move forward, it is crucial for all stakeholders—government, businesses, and communities—to collaborate and align their efforts towards this common goal. Together, we can pave the way for a greener, more sustainable future for generations to come.

For more insights and updates on the progress of CCUS and other sustainability initiatives, stay tuned to Net Zero News Network.