Rachel Reeves, the UK Chancellor, has announced plans to commit almost £22bn ($28.97bn) to fund carbon capture and storage (CCS) projects in two clusters in the north of England, which will include associated infrastructure and transportation.
The new Labour administration has pledged the money, to be spread over 25 years, for projects to secure carbon emissions from energy producers, wider industry and hydrogen power production.
The carbon capture clusters will be situated in Merseyside, north-west England, and Teesside, north-east England, with the government claiming the investment will eventually create thousands of jobs and help the UK meet climate goals.
The East Coast Cluster is backed by BP and Equinor, among others, while the other project is being developed by Eni.
The Labour Government came to power earlier this year after promising to introduce a raft of environmental and green energy projects including scaling back North Sea oil and gas production, loosening restrictions for onshore wind and setting up Great British Energy, a state-owned energy company to “partner with industry to deliver clean power by co-investing in leading technologies”.
The chancellor said the formal announcement, expected later on Friday, would act as a “drumbeat” to kick-start economic growth, one of Labour’s key election pledges.
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By GlobalDataHowever, some green campaigners have said the investment is misplaced.
In a published statement, Doug Parr, Greenpeace UK’s policy director, said the investment was “a lot of money [to] extend the life of planet-heating oil and gas production”, and called for more spending on offshore wind or home insulation projects.
Friends of the Earth also added that that Labour should be spending the money insulating people’s homes.
The new projects are a development of several announced in 2023 under the last Conservative Government to capture and store up to 30 million tonnes of CO₂ a year by 2030.
In December 2023, the UK’s Department for Energy Security and Net Zero (DESNZ) revealed a plan for a new UK carbon capture, usage and storage (CCUS) market by 2035.
The plan, known as CCUS Vision, aimed to encourage competition and drive down costs in the industry, adding there was a potential to store the carbon equivalent of taking six million cars off the road.
However, in March this year, a report claimed the strategy was based on optimistic techno-economic assumptions that are now outdated and unrealistic, said financial think tank Carbon Tracker.
It found that the CCUS strategy, which became a key pillar of net-zero plans, risks “locking consumers into a high-cost, fossil-based future, despite cleaner and cheaper alternatives being available”.
Carbon Tracker’s analysis of global CCUS projects suggests that the technology has a history of “over-promising and under-delivering”, and lacks evidence of cost improvements.
In July, GlobalData, Power Technology’s parent company, reported that the global insurance industry was witnessing a significant surge in patents related to clean energy insurance and carbon capture, reflecting a strategic shift towards supporting sustainable energy initiatives.
The number of patents for clean energy insurance skyrocketed from 1,537 in 2014 to 3,004 in 2023.
