United Kingdom Carbon Capture Market
The UK found itself in an ideal position to deploy CCUS due to its industrial experience, its capital investment landscape and its potential COâ‚‚ storage capacities (the largest in in Europe, with an estimated 78Gt of COâ‚‚ storage capacity in the UK Continental Shelf).
In late 2020, the UK Government set out its ambition for the country to become a world leader in CCUS by capturing and storing 20-30 Mt of carbon emissions per year by 2030, with a further binding target to reach net zero carbon emissions by 2050. This was followed by the publication of the CCUS Investor Roadmap in April 2022.
The roadmap outlines joint government and industry commitments to the deployment of CCUS in the UK and sets out the approach to delivering CCUS to industrial clusters.
The industry is responsible for around 16% of the UK’s emissions, with the seven industrial clusters
accounting for around 50% of all industrial emissions. To support the decarbonization of the industrial clusters, the UK government set up the Carbon Capture and Storage Infrastructure Fund (CIF) to provide over $1.2billions of investment.
Earlier this year, the government launched a process to determine the sequence in which it would support the decarbonizing of 4 regional industry clusters, placing the clusters in two tracks. Track 1 would start decarbonizing the industry from 2025 and Track 2 would start from around 2030.
The East Coast Cluster (ECC) and HyNet have been named as the UK’s first two carbon capture, usage, and storage Track 1 clusters:
• BP-led East Coast Cluster plans to capture carbon from fossil fuel power generation, biomass power production, hydrogen production, nitrogen production, steel production, and waste-to-energy projects in Teesside and Humber on the North Sea.
• Eni-led HyNet plans to capture carbon from a hydrogen production plant outside Chester in northwest England and store the carbon offshore while sending the hydrogen to a network of industrial hydrogen consumers in northwest England and northern Wales.
The majority of the clusters originally deemed eligible for the program, including the East Coast Cluster project, are located primarily or totally on the North Sea. The North Sea is home to much of the UK oil and gas production, and in 2021 the government signed a deal with the oil and gas industry to help lower carbon emissions, including a commitment for the government and industry to jointly invest up to $4.1 billion in CCUS projects.
For more information, contact Claudia.Colombo@trade.gov