Government sets out next steps for CCUS Clusters

Apr 01 2023


The UK Government's announcement has been broadly welcomed but does not go far enough, with many projects missing out.

The Carbon Capture and Storage Association welcomed the further information provided by the UK Government regarding the first round of CCUS deployment.

The Government has confirmed the final selection of the first carbon capture projects to be built under the CCUS Cluster Sequencing Process. These are sites that will connect to the carbon dioxide transport and storage infrastructure that will be developed through the initial “Track 1” clusters (HyNet North West and East Coast Cluster).

Successful projects will receive revenue support to cover the cost of operating with carbon capture, as well as in some cases, capital support from the Low Carbon Hydrogen Fund to cover some of the cost of installing capture equipment and connecting to the CO2 transport and storage network.

The projects selected today by the Department of Energy Security and Net Zero are:

East Coast Cluster

  • Net Zero Teesside Power
  • bpH2 Teesside
  • Teesside Hydrogen CO2 Capture

HyNet Cluster

  • Hanson Padeswood Cement Works Carbon Capture and Storage Project
  • Viridor Runcorn Industrial CCS
  • Protos Energy Recovery Facility
  • Buxton Lime Net Zero
  • HyNet Hydrogen Production Plant 1 (HPP1)

These projects represent a wide variety of sectors such as dispatchable low carbon power generation, industrial process emissions (cement, lime and energy from waste) and low-carbon hydrogen production.

The Government has also set out the forward timeline for selecting the next “Track-2” CCUS clusters to be operational by 2030, as well as further clarity regarding the Track 1 expansion process. This is essential in providing future opportunities to connect to the network for projects and clusters that have not been selected – or previously eligible to participate, giving them a route to decarbonisation.

Ruth Herbert, Chief Executive at the CCSA

“We are pleased to see Government pushing ahead with the first carbon capture projects. Collectively, these projects will capture millions of tonnes of carbon dioxide a year and protect and create many thousands of jobs in critical sectors, delivering significant economic growth in two of the UK’s industrial regions."

"However, today’s announcement will be particularly disappointing for the Humber region which emits more CO2 than any region in the UK – projects based there urgently need clarity, alongside other unsuccessful projects. Government must therefore set out the process for further projects to be added to the first two clusters. This will give an important route to market for the remaining shortlisted – and new – projects in vital industrial sectors, where CCUS is the only option for achieving net zero, as well as clarity for those developing greenhouse gas removal technologies such as direct air capture and bioenergy with CCS. Companies have spent significant sums of money to develop proposals and they will need reassurance that this investment is not lost."

"We welcome the launch of the process for the next two CCUS clusters, but now need to see a clear forward timeline. In addition, as per Chris Skidmore’s recommendation, we need to see a deployment plan for the whole of the UK, as all industrial regions need to decarbonise or risk seeing continued offshoring of our supply chain. Our member companies all around the country are investing in decarbonisation projects to meet the Government’s ambition of capturing 20-30 million tonnes of carbon dioxide by 2030, but this investment could go overseas to the US or Europe in the absence of a clear UK plan.”

David Parkin, HyNet Project Director at Progressive Energy

“We are absolutely delighted that five HyNet partners have been successful in receiving the go-ahead from Government today, enabling the project to move into construction in 2024. Together within the HyNet cluster, these projects will remove just under 3 million tonnes of carbon dioxide each year – supporting the UK’s net zero target."

"HyNet is at the forefront of the UK’s new British carbon capture sector – leading the way in the development of the infrastructure, skills and the supply chain."

"The North-West supports the most manufacturing jobs of any UK region. HyNet will enable the region to retain high value roles, secure 6,000 new jobs, attract inward investment and cultivate a supply chain across the region.  It will also give industry the ability to produce the environmentally friendly products that consumers are increasingly demanding."

"This is good news for the UK’s fight against climate change, good news for the North West and North Wales region, and good news for British industry and the economy.”

Stockton North MP Alex Cunningham

Alex, who is also Chair of All-Party Parliamentary Group on Carbon Capture, Utilisation and Storage, also welcomed the announcement but sounded warnings about the small number of projects – only 8 out of 40 shortlisted – going forward. Many in the East Coast Cluster have missed out including all those on the Humber.  

“I’m pleased to see the Carbon Capture and hydrogen projects on Teesside progress to the next stage and just hope final approvals will be in place soon," said Alex. 

"It is however very disappointing to see that out of the 40 longlisted projects only eight are going forward and that many in East Coast Cluster, including. any in Humber, are missing out." 

“It’s also disappointing to see that companies like CF Fertilisers are not on the list. CF Fertiliser is a major industry in Teesside and has encountered a number of issues in the past couple of years. It’s plant in the North West has closed and it’s Billingham base is working at reduced capacity. I would have hoped the Government would have seen the benefit in supporting this organisation – and the jobs it creates. Similarly, the Alfonar green aviation fuel project failed to make the cut." 

“As Chair of the All-Party Parliamentary Group on Carbon Capture, Utilisation and Storage, I will continue to work with the sector to promote schemes throughout the country and here in Teesside – and urge Ministers to expedite final decisions and demonstrate by action they are serious about Net Zero and the economic and environmental benefits it can bring.”

Scottish Carbon Capture & Storage

The UK Government has moved decisively to accelerate carbon capture and storage and turn the UK into a global leader in this important field said SCCS. It has today announced support for eight projects to join its first two clusters and launched the process for development of two more clusters. These actions, together with the £20bn in support for CCS announced in the Spring Budget, put it on track to achieve its long-stated goal to have four operational CCS clusters by 2030 and to be storing up to 30m tonnes of CO2 a year by then.

“Guarantees of £20bn provide confidence for tens of commercial investors, partnering in multiple projects, to build a climate-saving CO2 storage ambition unequalled in the world. Two current project groupings will be expanded. And two new Track 2 groupings are launched for competitive bidding,” said Professor Stuart Haszledine, chair of Carbon Capture and Storage at the University of Edinburgh. 

Acorn in Scotland and Viking in Humberside are specifically invited to enter bidding negotiations leading a second wave of Track 2 CCS cluster projects, with a deadline set for 28 April. This follows the selection of East Coast Teesside and HyNet Merseyside as the first two Track 1 clusters in October 2021.

The greatly accelerated process for Track 2 will be supervised by the new UK Department for Energy Security and Net Zero (DESNZ). The tight deadline leaves just four weeks for additional new bidders, who must already be on a pathway to acquiring a CO2 storage licence and have the ability to link by pipeline to CO2 sources. Both projects have to demonstrate that storage will exceed 10MtCO2/yr by 2030. That will extend industry decarbonisation along the entire east coast, which could create options for shipping delivery of CO2 captured from elsewhere in UK or, in time, from other countries.

SCCS welcomed the scale of ambition in today’s announcements. Carbon capture and geological storage is an essential technology to decrease future carbon emissions from industry, and enable recapture and storage of CO2 greenhouse gases from historical and future hard-to-catch dispersed emissions. CCS is proven in full-scale North Sea and offshore operations since 1996.

“CCS is a tens of million tonnes CO2 remedy, appropriate to a millions of tonnes CO2 problem,” said Professor Haszledine.

However, the UK Government also specifies that the UK will continue to issue new oil and gas exploration and production licenses, prompting accusations of using CCS as a cover for continued emissions.

Professor Haszeldine said: “The Government is trying to ride a green industrial CCS horse and a black oil and gas stallion simultaneously, making this a long overdue start to carbon clean up, but an incomplete carbon transition.”

Once it has selected its Track 2 cluster candidates, it must also accelerate their development much faster than Track 1 through assessment and planning because these Track 2 UK investors have already been designing their projects since 2015, then on hold since 2021.

“Attractive CCS opportunities are emerging globally in the USA, Denmark and Norway. The UK is now in a race to keep the best global talent and to grow project numbers fast enough to create world leading industries which can design and supply this new immense offshore opportunity globally,” said Prof Haszeldine.

“Can follow-on projects be rapidly consented and licensed for commercial investment? Planning and pace need to match what the UK did during the North Sea 1990s oil boom which transformed industrial investment.”

Projects continuing to development in Track 1 do not include bioenergy projects at Drax and Lynemouth power plants which both import wood pellets, although these will be invited into Track 1 + negotiations later this year. Both projects are capable of providing “negative emissions” to recapture emitted CO2, but need to pass strict sustainability criteria.

Industrial projects approved to start construction accelerate a welcome spread of CCS technologies including BP’s gas-fuelled electricity with CCS and hydrogen generation at Teesside East Coast. Connecting to Merseyside HyNet are five projects including hydrogen production, two on cement, two on energy-from-waste recycling.

Mark Sommerfeld, Head of Power and Flexibility, for Biomass UK

It was disappointing to not yet advance Drax and Lynemouth, two of the most advanced bioenergy with carbon capture and storage (BECCS) projects in the world, further postponing the delivery of BECCS in the UK, while countries like the US are providing direct support for their delivery, said Mark.

The delay further detracts from the UK market, and puts viable BECCS projects at all scales at risk. 

“It is frustrating that Government continues to string out its decision making on how it wishes to deliver bioenergy carbon capture and storage (BECCS). BECCS is the only carbon capture solution that actively leads to negative emissions while also generating low carbon power. Earlier this month, the Climate Change Committee (CCC) reiterated that the delivery of BECCS was critical to realising our 2050 net zero targets and delivery of a decarbonised power system by 2035."

“While other nations such as the US are surging ahead in directly supporting BECCS, utilising expertise fostered in the UK, the Government have again postponed its decision on delivering two of largest and most advanced BECCS projects in the world." 

“At the same time, since the Government has made their initial assessment, BECCS projects on a range of medium size biomass sites have also significantly advanced but have not yet been given any indication of a clear route to market, despite the 2 GW of installed capacity and significant potential for realising carbon removals. Such projects must be clearly included in future allocation processes for carbon capture support."

“These delays are stopping investors from committing to the UK while also being attracted to other markets. Government must now address these delays and make clear how they intend to see BECCS delivered at a range of scales as matter of urgency.”

Carbon Capture and Storage Association
HyNet


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