Ruth Herbert, Chief Executive of the Carbon Capture & Storage Association, lifts the lid on Carbon Capture, Utilisation and Storage technology
The time has come for Carbon Capture, Utilisation and Storage (CCUS) technology. The process, involving the capture of carbon dioxide (CO2) at emission sources or directly from the air, is essential to meet net zero targets and is now winning global support from governments and industry.
CCUS technology enables captured CO2 to be transported via pipeline, ship or other methods for permanent storage or utilisation. After nearly two decades of uncertainty, the UK is gearing up to deliver CCUS projects across four regional clusters. The urgency is palpable: meeting net zero targets requires capturing and storing roughly 7.6 billion tonnes of CO2 globally annually by 2050, the IEA estimates.
In the UK alone, the Government’s net zero Strategy mandates capturing over 50 million tonnes annually by 2035. At the Carbon Capture and Storage Association (CCSA), we are crystal clear this isn’t a goal for a decade’s time; it’s imperative to act now.
The UK’s progress on CCUS
These are big numbers, and it’s clear there’s a lot to do in a short space of time. Unfortunately, the UK’s progress on CCUS over the last 18 years can, at best, be described as a “start-stop”. The first significant attempt, in 2007, involved the Government initiating a competition to demonstrate the complete CCUS chain from “single source to single sink.” Regrettably, this competition was later terminated. A subsequent CCUS competition met a similar fate, being cancelled in 2015.
A span of five years elapsed before the unveiling in 2020 of a Ten Point Plan intended to ensure “at least four CCUS clusters” [are] operational “by 2030”. (1) As part of this plan, the Government launched the CCUS Cluster Sequencing Programme in May 2021.
This approach stems from the insights of the 2018 CCUS Cost Reduction Task Force, which suggested that the most effective route to CCUS development in the UK was the creation of clusters – where carbon capture sites for power, industry, and other sectors share a common CO2 pipeline and storage infrastructure. This collaborative setup is geared to capitalise on economies of scale, resulting in a lower cost per abated tonne.
In May 2021, the Government launched their cluster sequencing plan, the competition process to select the first four clusters to proceed and the capture projects that would connect to them. In this year’s Spring Budget, the Government also committed that £20 billion would be available to support CCUS projects.
On the back of this announcement, we have seen progress in the delivery of the cluster programme, with ‘Track-1’ clusters in the North-West and North-East of England now moving into final negotiations with the Government, whilst ‘Track-2’ clusters based in Scotland and on the banks of the Humber can look to the future with great confidence. This is good news, yet with many regions and industries to ‘future-proof’ and decarbonise and only eight capture sites confirmed so far, much remains to do.
Transition toward a low-carbon economy
This should be the moment that invites the regions that have long been the cornerstone of the UK’s industrial strength to step forward as leaders, initiating a pivotal transition toward a low-carbon economy. However, for the large majority of applicants to the cluster programme, who have been unsuccessful, uncertainty over their future continues. Take cement, glass, and refineries – where decarbonisation hinges on the success of CCUS.
A comprehensive CCUS deployment plan would deliver a bright future for such industries in the UK, potentially exporting products manufactured while emissions are captured. Without CCUS they will be unable to compete in an emerging global market for low-carbon products and without a Carbon Border Adjustment Mechanism they will be increasingly undercut in current markets. It is clear that any further delays or belt-tightening on the CCUS programme raises the prospect of increased offshore manufacturing and expensive imports.
CCSA research shows widespread CCUS deployment could safeguard 77,000 existing jobs and create 70,000 new jobs. It could drive inward investment into regions that have suffered under-investment by attracting new businesses into areas with sought-after CO2 infrastructure. It could enable the UK to corner the emerging market for low-carbon products, estimated to be worth at least £3 trillion by 2050, and the opportunity to export CCUS skills and services worldwide.
The UK’s regulatory and incentive framework
A debate revolves around whether the UK’s regulatory and incentive framework can measure up to the US tax credit system, already a catalyst for substantial CCUS investment. Notably, U.S. tax credits are accessible based on eligibility, whereas the UK employs lengthy competition and negotiation processes, aligning with its focus on regional decarbonisation infrastructure.
In contrast, the U.S. tax credit system rapidly offers abatement support sufficient to drive investment into a large volume of low-cost “source to sink” CCUS projects, enabling swift technology deployment and creating a substantial CCS industry.
The UK incentive framework under development in the Contracts for Difference (CfD) and Regulated Asset Base schemes, for capture projects and CO2 transport and storage, respectively, is designed to enable large-scale, coordinated industrial cluster development. However, industry has concerns that close-to-commercial projects, for example, low carbon fuels, don’t currently have a route to access the regulated networks and the length of the CfD awards process could mean the UK misses out on any first mover advantage it may have had to establish a lead on low carbon products.
There is no option for the UK economy to stay as it is. This is a global race with the prize of a ‘once in a century opportunity’ to be at the forefront of the global net zero transition. We can either speed up or slow down. It’s clear to me that it’s time to accelerate.
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