Uk: Oeuk Urges Government To Support A Clear Funding Path For The Uk’S Carbon Capture Ambitions Ahead Of Spending Review

Leading industry body Offshore Energies UK (OEUK) is asking the Chancellor to stick to commitments to back two additional major carbon capture, usage and storage (CCUS) projects in North-East Scotland and the Humber ahead of the Comprehensive Spending Review (CSR).

Together the Track-2 projects, Viking in the North East of England and Acorn, the Scottish cluster, have the potential of investing over £25bn into the UK economy by 2035, with private sector investment unlocked by Government support and creating over 30,000 jobs.

As the UK looks to spark growth and deliver net zero, CCUS is a critical part of future proofing its national industrial base. The process extracts and stores carbon from energy-intensive industries such as cement and chemical manufacturing. This makes it essential to enabling key industrial assets to become sustainable hubs offering firms and their skilled people a long-term future.

Ahead of the CSR, OEUK calls for the Government to maintain existing spending commitments for Carbon Capture and Storage (CCS) Track-1 projects and announce both a clear funding envelope for Track-2 projects and for the path for those projects that sit outside of the current track process.

Currently the government has supported two UK projects, Hynet in Merseyside and the East Coast Cluster in Teesside, in 'Track-1', which is the first phase of the government’s CCUS programme. Together these projects will capture up to 20 million tonnes of C02 by 2030 from industrial emitters including power plants and future hydrogen production plants.

Recent media reports have raised concerns that funding for Track-2 projects, the next phase of developments to be supported by government, could be deprioritised as the UK Government navigates budgetary pressures. OEUK warns that stepping back from investment would undermine the UK’s economic growth and net zero objectives, at a critical time for the future of UK industry.

According to ONS data, the UK’s chemicals sector has had a 38% fall in output in four years, with cement down 40% in the same period. Energy intensive industries require reliable and affordable power and fuels for industrial processes and a cost-effective path to decarbonisation.

OEUK’s CEO, David Whitehouse comments:

'Carbon capture technology can help future-proof the UK’s heavy industries and their workers. We ask the government to hold true to its carbon capture commitments to give industry the clarity it needs to get on with the second track of these projects. This will help crowd in the private investment we need to build self-sustaining, world-leading industries right here in the UK.

'Manufacturers around the UK need this technology to build a sustainable net zero economy. If we get this right, the new CCUS sector could protect over 100,000 jobs in industrial regions, contribute billions to the economy this decade and be worth £100bn to the supply chain by 2050.? These investments will back key hubs to compete globally by stripping carbon out of their operations and create the innovative products, skills and services of the future.

'We welcome the UK Government’s previously announced support for Track 1 projects. It is critical now that in support of economic growth and industrial decarbonisation, it now announces a clear funding envelope for Track-2 projects and the path for those projects that sit outside of the current track process.

'The UK is well placed to create a world-leading CCUS sector. We have the geology, technology and people to make it a success. We must build on the skills and supply chains of our world class oil and gas sector and back firms and their workers to unlock this opportunity for Britain.

'With a clear funding envelope, our CCUS sector can providing enduring value in the UK economy, supporting the decarbonisation of our hard to abate industries. Our path to net zero must be decarbonisation not deindustrialisation.

'OEUK recognises the challenging demands on HM Treasury but this government has prioritised growth and energy security while it works to decarbonise our economy. As a sector, we’re aligned with this ambition and CCUS is critical to its fulfilment.'

In the coming months a raft of consultations will shape the future of the North Sea and the UK’s diverse energy mix. OEUK is campaigning for a homegrown energy future and for an industrial strategy built on a secure, sustainable and affordable energy base, for which CCUS is a key enabler.

Find out more about OEUK’s campaign for a homegrown energy future here: www.oeuk.org.uk/manifesto.

Original announcement link

Source: OEUK