Some £28.6m is due to be invested by the National Wealth Fund in a carbon capture project in the Peak District, the Chancellor of the Exchequer has announced.
This funding for the Peak Cluster project is the first step towards the development of a leading carbon capture pipeline between cement and lime companies in the Peak District, which will store emissions deep below the Irish Sea.
The scheme is one of the world’s largest cement decarbonisation projects, aiming to prevent more than 3 million tonnes of CO2 entering the atmosphere every year, and providing a secure domestic supply of cement and lime products for the British construction and manufacturing industry.
It is backed by £31 million from private partners including Holcim, Tarmac, Breedon, SigmaRoc, Summit Energy Evolution and Progressive Energy, together with the Morecambe Net Zero project, and could create and secure 13,000 jobs in the Midlands and North West.
The project is the National Wealth Fund’s first investment in carbon capture since the Chancellor highlighted it as a priority in her new strategic direction for the Government’s principal investor back in March.
Cement and lime are two of the hardest industrial sectors to decarbonise due to the high levels of CO2 emissions generated in the manufacturing process which cannot be reduced through transitioning to low carbon fuels.
The National Wealth Fund will commit at least £5.8 billion by 2030 in hydrogen, carbon capture, ports and supply chains, gigafactories and EV supply chains, and steel, the government said.
Chancellor of the Exchequer Rachel Reeves said:
“The National Wealth Fund is a force for growth, investing £3 billion into the British economy and securing 12,500 jobs.
“We’re modernising the cement and lime industry, delivering vital carbon capture infrastructure and creating jobs across Derbyshire, Staffordshire and the North West to put more money into working people’s pockets.”
Energy Secretary Ed Miliband said:
“This landmark investment will catalyse our carbon capture sector to deliver thousands of highly skilled jobs and growth across our industrial heartlands, as part of our Plan for Change.
“Workers in the North Sea and Britain’s manufacturing heartlands will drive forward the country’s industrial renewal, positioning them at the forefront of the UK’s clean energy transition.”
John Flint, CEO of the National Wealth Fund, said:
“Substantial private investment, deployed at risk, will be needed to develop and deliver carbon capture projects across the UK. Through its investments, the NWF is well placed to support this. Capital must be committed now, especially in hard to abate sectors such as cement and lime, to ensure a pipeline of projects is ready for deployment and the UK is able to meet its ambitious carbon capture targets.
“The NWF has played a key role in structuring the transaction to crowd in private sector co-investment while taking early development risk to catalyse future investment. Our involvement demonstrates how we can use our risk capital to solve problems and manage investment uncertainty, amplifying government policy and ultimately removing the barriers for private investors to support this project post-FID.”
John Egan, CEO of Peak Cluster Ltd, said:
“Peak Cluster is focused on securing a sustainable future for the cement and lime industry. Together with MNZ, the UK’s biggest carbon store, we will capture, transport and store CO₂ to support industry to thrive in a low carbon future.
“Through the National Wealth Fund, Government will support the development of essential infrastructure to secure good jobs with good wages, produce sought-after low carbon products here in Britain, grow the UK’s supply chain and skills base, secure private investment and lead the global low carbon technology sector. Peak Cluster, in partnership with MNZ, ticks every one of these boxes.
“We will work closely with Government to ensure that Peak Cluster and MNZ together can help secure the future of this foundation industry, creating a backbone of industrial opportunity that benefits communities across the Midlands and North West of England – for the UK and beyond.”
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