UK Government announces plans to establish competitive carbon capture market

The strategy – entitled CCUS Vision – outlines the UK's roadmap for evolving from initial projects supported by government backing to establishing a competitive market in this sector. This means that UK companies will compete to construct carbon capture facilities and sell their services across the globe.

This marks the most recent advancement in implementing the recently revealed £20 billion investment for the development of CCUS technologies. The goal is to store 20-30 million tonnes of CO2 annually by 2030, fostering the creation of 50,000 jobs by the same year.

CCUS Vision involves several measures to assist the Government in achieving this goal, which include:

Shifting to a competitive allocation process for carbon capture projects starting in 2027 to accelerate the growth of the UK's CCUS sector.

Establishing conditions for projects unable to transport CO2 via pipelines to participate in the market from 2025 onward, utilising alternative modes of transport such as shipping, road, and rail.

Launching a working group led by industry to identify and adopt solutions to reduce the cost of capturing CO2.

The Government claims that the plan is anticipated to boost the UK economy by £5 billion each year by 2050, making the UK a “pioneer” in this kind of technology whilst assisting in the drive towards net zero.

Commenting on the plans, Energy Security Secretary Claire Coutinho said: “Thanks to the UK’s geology, skills and infrastructure, we are in a unique position to lead the way on carbon capture technologies.
“That is why we’re making one of the biggest funding commitments in Europe on carbon capture that will cut emissions from our atmosphere, while unlocking investment, creating tens of thousands of jobs and growing the UK economy.”

Energy efficiency and Green Finance Minister Lord Callanan added: “We need pragmatic answers to the carbon challenge, and with our infrastructure, skills and geology, the UK is in pole position to take advantage of game-changing carbon capture and storage technology.

“Today we’re publishing a blueprint to deliver a world-leading UK carbon capture industry, so that we have a competitive market in this exciting new technology by the middle of the next decade.

“Backed by an unprecedented £20 billion investment, this is also a pivotal milestone in our journey to net zero that will drive economic growth, unlock investment and create tens of thousands of jobs in our industrial heartlands.”

Carbon capture projects in the UK

The new plans follow the announcement earlier this year that two new carbon clusters will be established to support the Government’s ambitions to decarbonise. The UK now has a total of four clusters – HyNet in the North West, the East Coast Cluster in Teesside and the Humber, Acorn in Scotland and Viking in the Humber.

These hubs will construct integrated energy systems that optimise the UK's existing infrastructure, playing a role in the nation's deliberate and practical strategy to achieve net zero.

The UK Government has also today announced progress in delivering these carbon capture facilities. This includes:

Agreeing commercial terms with the Northern Endurance Partnership (NEP) around Teesside and the Humber, allowing expansion of that cluster. Following an assessment of readiness in the New Year, the Government will consider the best time to launch the expansion process in 2024.

A process to accelerate the set-up of the CCUS clusters announced this summer alongside the identification of suitable capture projects.

Chris Daykin, General Manager of the NEP, “Today’s announcements mark another positive milestone in the development of the East Coast Cluster and the UK CCUS industry.

“Agreeing the key commercial principles through the Heads of Terms is a crucial step in the decarbonisation of the North East region and delivering jobs. We look forward to the expansion process launching from 2024 and agree that the selection of projects by HMG should be matched to the available transportation and storage capacity, so that projects and stores are developed at the same pace and equivalent level of maturity.

“We thank the UK Government for their continued support as we work to complete the final agreements in the coming months, enabling NEP to take Final Investment Decision in September 2024.”