Carbon capture use and storage ‘commercial agreements’ reached in the UK

The projects will sit within two ‘clusters’ in the north of England and, when operational, will result in a sizeable proportion of greenhouse gas emissions from industrial plants in the areas being removed from the atmosphere.

A number of power-, industrial-, and hydrogen-CCUS projects are envisaged to become operational within the two clusters. The HyNet cluster in the north-west, and the East Coast Cluster in the north-east, were previously selected by the UK government for priority treatment – further clusters are envisaged under subsequent processes after these initial Track 1 projects, with the new Labour government reiterating the previous Conservative-led government’s commitment to invest £20 billion in growing the UK’s CCUS industry over the coming decades.

The government said the new projects “will create 4,000 new jobs, sustain important British industry, and help remove over 8.5 million tonnes of carbon emissions each year”, which it added is the equivalent of taking around four million cars off the road.

Prime minister Keir Starmer said: “We’re reigniting our industrial heartlands by investing in the industry of the future. 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.”

The previous government pledged £20 billion of public funds for CCUS projects in the 2023 Budget, and engaged with industry on the development of CCUS-related business models that will offer financial support to businesses that invest in the technology and, in doing so, help the government meet its climate targets. A new Energy Act passed into law in October 2023 provides the legal basis for those business models to be developed and entered into.

Businesses wishing to capture their carbon emissions and then have them transported and stored offshore in UK waters will be expected to adhere to a new CCS Network Code, which has been the subject of consultation but is yet to be finalised.