£22bn for CCUS and hydrogen in northern clusters

According to the government, newly backed projects at the north west and north east clusters will create up to 4,000 direct jobs, with a further 50,000 jobs supported over the long term. It’s also claimed that industrial decarbonisation enabled by the sites will help remove over 8.5 million tonnes of carbon emissions each year.

“Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this groundbreaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all,” said prime minister Keir Starmer.

The announcement is the latest chapter in the UK’s ongoing carbon capture saga, which began back in 2009 under the last Labour government. The intervening decade-and-a-half has seen the UK fail to deliver a single carbon capture project at scale, with environmental groups and some scientists raising doubts about the technology’s viability as well as its compatibility with net zero.

Blue hydrogen

Carbon capture at Teesside and Merseyside will be paired with the production of blue hydrogen, where fossil fuels are used as a feedstock to create clean-burning hydrogen fuel. As a result, energy companies including BP, Equinor and Eni will play significant roles in the clusters, benefiting from the huge pools of funding on offer, while also delivering private investment.

Although the hope is that most of the associated emissions are captured, blue hydrogen is acknowledged as less clean than green hydrogen, which relies on renewable electricity. There are also fears that investing in blue hydrogen could lock the UK into fossil fuel dependence longer than is necessary.

“For a government that is committed to tackling the climate crisis, £22bn is a lot of money to spend on something that is going to extend the life of planet-heating oil and gas production,” said Doug Parr, Greenpeace UK policy director.

“The bulk of this cash should be invested instead in creating new jobs in the green industries of the future, like in offshore wind, or rolling out a nationwide home insulation programme that will keep our homes warmer, energy bills lower and less dependent on gas.”

CCUS as necessity

Conversely, organisations including the International Energy Agency (IEA) as well as the UK’s own Climate Change Committee have emphasised the importance of carbon capture technology, claiming it is an essential tool on the pathway to decarbonisation.

“We can’t hit the country’s targets without CCUS so this commitment to it is very reassuring,” said James Richardson, acting chief executive of the Climate Change Committee.

“We know these projects will provide good, reliable jobs in communities that need them. It is important that prosperity for these parts of the country is built into a clean energy future.”

Unsurprisingly, the announcement has been welcomed by representatives of the carbon capture and hydrogen sectors, as well as from a wide array of voices from across industry.

“The integration of CCUS technology with hydrogen production is pivotal for achieving our net zero targets,” said Clare Jackson, CEO of Hydrogen UK. “CCUS-enabled hydrogen not only provides a low carbon, and scalable energy solution but also ensures the UK remains at the forefront of the global hydrogen economy.”

Policy shift

Prof Stuart Haszeldine, Professor of Carbon Capture and Storage at Edinburgh University, added: “This is fourth time lucky for CCS in the UK. After three false starts on projects with single sources to capture CO2, a change of philosophy has produced multiple industrial CO2 capture projects, mutually supporting pipelines feeding into secure geological stores.

“Anticipating successful CCS operating projects, the UK government now needs to plan future CCS projects to operate without government grant support. Existing policies are misdirected to pay for permissions to emit. What is needed for the future is a payment reward for storage of CO2. That can be achieved by an extended obligation on oil company suppliers of fossil carbon to capture and store CO2 emissions arising from their products.”