Wednesday, October 9, 2024
HydrogenLatestNews

Government confirms £22bn for CCS and hydrogen

The UK Government has committed to funding the country’s first carbon capture sites and CCUS-enabled hydrogen projects.

According to the Labour administration, the new projects will deliver 4,000 new jobs and remove more than 8.5 million tonnes of carbon emissions each year – which is the equivalent of taking around 4 million ICE cars off the road.

The funding for the two initial projects will go into the North West and North East of England, one on Merseyside and one on Teeside, with the aim to directly create 4,000 jobs but also another 50,000 jobs in the longer term – and could bring an expected £8 billion in private sector investment to the regions.

According to the government, up to £21.7 billion will be available across a 25 year period for the two sectors of Carbon Capture, Utilisation and Storage (CCUS) and hydrogen.

Research suggests the UK has enough capacity to store 200 years’ worth of emissions. CCUS technology, which removes CO2 emissions before it reaches the atmosphere and stores it safely beneath the seabed, has already been in development for two decades.

Various governments in the past have explored using it as part of 2050 net zero plans, and it is referenced by the Committee on Climate Change as an important “necessity” on the road to net zero, especially in hard-to-decarbonise heavy industries, as well as being supported by the International Energy Agency and the Intergovernmental Panel on Climate Change.

Alongside carbon capture, the administration hopes that the investment will accelerate the growth of low carbon hydrogen through the development of the UK’s first large-scale production facility.

Once the facilities are up and running, it is expected to bring around £5 billion a year to the UK economy by 2050.

Prime Minister Keir Starmer said that the government was “reigniting our industrial heartlands by investing in the industry of the future”.

Starmer said:

“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.”

Energy Secretary Ed Miliband said this was the “start of a new era”, after the closure of the last coal-powered energy station at the beginning of last week.

Miliband said:

“By securing this funding, we pave the way for securing the clean energy revolution that will rebuild Britain’s industrial heartlands.

“I was proud to kickstart the industry in 2009, and I am even prouder today to turn it into reality. This funding is a testament to the power of an active government working in partnership with businesses to deliver good jobs for our communities.”

Chancellor of the Exchequer, Rachel Reeves, said: 

“This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside, igniting growth in these industrial heartlands and powering up the rest of the country.

“Working in partnership with business is at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off.”

Louise Kingham, SVP Europe and head of country, UK for bp, said:

“Collaboration is key in helping to progress and deliver the energy transition in the UK, and we look forward to continuing to work alongside the government and our partners to move these innovative projects forward.”

Alex Grant, SVP and head of country, UK for Equinor, said:  

This will help decarbonise the country’s industrial heartlands and achieve its net zero ambitions whilst providing jobs and value creation.

The UK will continue to be a key market for Equinor, building on our history of significant energy provision along its East Coast, which is transitioning from traditional oil and gas demand to renewables and low carbon options like CCS and hydrogen.

Eni CEO, Claudio Descalzi, said:

“HyNet will become one of the first low-carbon clusters in the world and the project will decarbonise one of the key energy-intensive industrial districts as well as unlock significant economic growth in this region of the UK.

“This commitment is clear evidence of how governments and industry can work together to implement pragmatic and effective industrial policies, in order to accelerate decarbonisation.”

James Richardson, Acting Chief Executive of the Climate Change Committee, said:

“We can’t hit the country’s targets without CCUS so this commitment to it is very reassuring. It will no doubt provide comfort to investors and business about the direction of travel for the country.”

Emma Pinchbeck, Energy UK’s Chief Executive, said:

“CCUS is a tool in our armoury of technologies which we need to decarbonise parts of energy that we currently can’t do with clean electricity, such as major industrial processes.

“The energy transition is gathering pace, and the development of CCUS here for industrial processes unlocks inward investment, creates jobs and helps areas with a proud history of engineering and industry pioneer the technologies of the future in the UK.”

Olivia Powis, CEO of the Carbon Capture and Storage Association (CCSA), said:

“The industry has made significant strides towards deploying carbon capture projects and by establishing the first 2 CCUS clusters in the North West and North East of England, it means that we can deliver thousands of new highly skilled jobs whilst reducing our CO2 emissions and retaining existing jobs in our industrial areas in critical industries like cement and manufacturing across the UK.”

Celia Greaves, CEO of the Hydrogen Energy Association, said:

“Supporting hydrogen at scale in 2 of the biggest UK industrial clusters is the government giving hydrogen another green light as a key component of its green energy ambitions.

“We particularly welcome the news that this will provide thousands of new jobs given the HEA’s solid focus on hydrogen’s role in delivering clean growth.”

Clare Jackson, CEO of Hydrogen UK, said:

“This initiative is a crucial step forward for regional development, driving economic growth, and creating high-quality jobs across the country.

“The integration of CCUS technology with hydrogen production is pivotal for achieving our net zero targets. 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.”

Mike Clancy, General Secretary of Prospect union, said:

“Siting this new technology in areas where high carbon jobs are being phased out is also vital to support our industrial heartlands and ensure future jobs and skills. 

“CCUS also allows the UK to retain and develop domestic energy intensive industries while still cutting carbon. The alternative is simply offshoring industry, losing jobs and failing to genuinely cut emissions.”

Rain Newton-Smith, CEO, Confederation of British Industry (CBI) said:

“Investments in CCUS will not only enable key decarbonisation projects to become a reality but will pave the way for meaningful industrial decarbonisation.

“It also has the potential to unlock high quality jobs and commercial opportunities, as well as further develop existing supply chains.”

Image from Shutterstock

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