Industrial giants power up CCS plans

A raft of big carbon capture announcements have been made today, including a coalition of major energy companies planning to form the UK’s first industrial carbon capture and storage (CCS) cluster, the Grangemouth petrochemical complex gearing up to be hooked up to a CO2 pipeline, and the government setting out new funding for the sector.

The Northern Endurance Partnership (NEP), Net Zero Teesside and Zero Carbon Humber collaborations announced today that they had come together to form the East Coast Cluster. It puts industry giants such as BP, Shell, TotalEnergies, SSE Thermal, National Grid, Drax, Equinor, British Steel and Uniper around the same table to develop decarbonisation infrastructure jointly.

The three projects have already secured a combined £73m of government money earlier this year, intended to fund preparatory engineering studies for a gas-fired power station with CCS, ‘blue’ hydrogen production and an offshore storage system.

NEP, which is developing the pipeline and storage infrastructure, will today submit an application for the partnership to become one of the first CCS ‘industrial clusters’ to be backed by the government. It has the potential to capture, transport and store 27m tonnes of CO2 per year – about 6.5% of the UK’s greenhouse gas output last year. The partnership says it could support around 25,000 jobs on average between 2023 and 2050 in relatively deprived areas – chiming with the Conservatives’ ‘levelling up’ agenda.

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Ben Houchen, the Tory Tees Valley mayor, said: “The success of this project is not only crucial for achieving net zero, but also a way of ensuring good quality, well paid jobs are supported across Teesside, Darlington and Hartlepool for generations to come. The Net Zero Teesside project, which is joining other clean energy initiatives at Teesworks, will position our region as a leader in innovation and the sector. I’m pleased that we can work with our neighbours in the Humber to deliver an even more positive impact for the whole UK.”

If successful, it would become one of two schemes to enter ‘track-1’ of the government’s support scheme for CCS projects, intended to get them up and running by the mid-2020s. The consideration of funding for individual schemes within these clusters will begin later in the year.

The winners of track-1 are due to be announced in October, together with details of a future track-2 process for other clusters.

Also in the running for funding are HyNet North West, Scotland’s Net Zero Infrastructure (linked to the Acorn CCS and hydrogen projects), South Wales Industrial Cluster, and Humber Zero, centred on the southern side of the Humber estuary at Immingham. Despite its geographical proximity, it has not joined the East Coast Cluster.

NEP’s managing director Andy Lane said: “The UK needs to decarbonise industry to reach net zero. Nearly half of all carbon emissions from UK industrial clusters come from the Humber and Teesside, making the East Coast Cluster the single biggest opportunity to decarbonise UK industry. Hundreds of thousands of jobs have relied on the industries which have grown in these regions and the East Coast Cluster, by decarbonising hard-to-abate industries, aims to keep it that way, while developing a platform for UK industry to compete on a global scale.”

“Carbon capture and storage and hydrogen are both crucial technologies for reaching the goals of the Paris Agreement. To deliver them at scale and create real change we need collaboration like never before. And this is what we are doing with our bid to create the East Coast Cluster, working with our partners in the Humber, Teesside and the Northern Endurance Partnership. We can deliver deep decarbonisation of these major industrial regions and help the UK’s journey to net zero, safeguard jobs and develop world-leading industries,” said Grete Tveit, senior vice president for low carbon solutions at Equinor.

Meanwhile, INEOS signed a memorandum of understanding with the Acorn CCS project today, connecting Scotland's only oil refinery to the scheme. Around 1mt from the Grangemouth refinery, operated as a joint venture with PetroChina, will be captured and stored by 2027.

“INEOS and Petroineos at Grangemouth recognise the importance of reducing greenhouse gas emissions from our industrial processes. As one of Scotland’s largest manufacturers and employers, we acknowledge that we are operating a CO2 intensive industry and we have a significant role to play in helping Scotland reach its Net Carbon Zero target by 2045. We have already made significant reductions since taking ownership of the site and we are delighted to be taking this further by supporting the Acorn CCS Scottish Cluster bid. Once operational, the carbon capture and storage system will provide an essential route to permanently and safely capture and store CO2 emissions for large industrial emitters throughout Scotland with significant positive impact for climate change and the country,” said Andrew Gardner, chair of INEOS Grangemouth. 

Just transition minister Richard Lochhead said: “Grangemouth is a leading manufacturing centre in Scotland and will play a vital role in our just transition to net zero. This announcement is an important step for unlocking that potential. It is critical that the UK Government selects Acorn and the Scottish cluster to be among the first CCS clusters to be awarded funding through its current cluster sequencing process. Today’s announcement from INEOS and Petroineos further strengthens the case for UK government support.”

INEOS is also involved in Danish and Dutch CCS projects.

Meanwhile, Whitehall made a series of further announcements on support for industrial decarbonisation this week:

  • Applications for £19.5m in grant funding for “novel” carbon capture, usage and storage technology will open on Monday, split into two lots. The first provides up to £1m for R&D and pilot projects, the second to put technologies into action at intermediate scale (around 100t of CO2 per day) with up to £5m per project. The CCUS Innovation 2.0 competition is part of the £1 billion Net Zero Innovation Portfolio, intended to help deliver the Ten-Point Plan for a Green Industrial Revolution.
  • A contractor to deliver a nine-month review of ‘next generation’ CCS technology will be sought from August, with up to £200,000 made available.
  • A new Industrial Fuel Switching Competition may open this autumn, subject to confirmation, aimed at biomass/waste, electrification and hydrogen systems. It would cover all eligible project costs for feasibility studies (£50,000-£300,000) and for demonstration projects (£1m-£6m.

Stream 1 Phase 1 and Stream 2 of the £60m Low Carbon Hydrogen Supply 2 Competition opened for applications on 25 June.

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