Chancellor Jeremy Hunt has confirmed a £20 billion UK Government support package for carbon capture utilisation and storage (CCUS).
But developers of a flagship north-east scheme, Acorn, must wait for further details.
In his 2023 Spring Budget, the chancellor said: “I am allocating up to £20bn of support for the early development of CCUS, starting with projects from our east coast to Merseyside to North Wales.”
This will pave the way for CCUS schemes “everywhere across the country” by 2050, he added.
The Acorn Project on the Buchan coast must be one of the beneficiaries of this additional investment if we are to transform our region into the net-zero capital of Europe.”
Ryan Crighton, policy director, Aberdeen and Grampian Chamber of Commerce
It is unclear whether the Acorn scheme planned for St Fergus, near Peterhead, will be among those to receive backing.
Papers accompanying the budget say a shortlist of eligible projects for the first phase of CCUS deployment will be announced “later this month”.
Some projects will be able to enter a selection process for “track one expansion” to be launched this year.
Two additional clusters will be selected through a track two process, with further details to be announced “shortly.”
The government aims to introduce new legislation in a future Finance Bill to establish a new tax treatment for payments made into decommissioning funds by oil and gas companies, in relation to the repurposing of oil and gas assets for use in CCUS projects.
Labelling the funding a “clean energy reset”, the chancellor said the investment would help create up to 50,000 jobs and support the UK’s target to capture 20-30 million tonnes of emissions per year by 2030.
‘Turning point’
Carbon Capture and Storage Association chief executive Ruth Herbert said: “This marks a turning point for this vital sector, delivering the much-needed certainty to investors that the UK is serious about delivering CCUS.”
“We can now move forward with implementing the initial CCUS clusters.”
Ms Herbert said the industry was now overseeing “a healthy pipeline of projects”, with other proposed schemes now “eagerly awaiting their turn” to move forward.
She added: “We look forward to seeing which projects have been chosen to move to construction, the forward timeline for selecting the next CCUS clusters that need to be operational this decade, and a swift passage of the Energy Bill through parliament, to finalise the regulatory framework for the industry.
Acorn ‘must benefit’ from funding
Plans for a north-east carbon capture scheme have been on the table for almost two decades.
More waiting was not what many backers had in mind.
Aberdeen and Grampian Chamber of Commerce policy director Ryan Crighton said: “We welcome the £20bn funding for the development of carbon capture projects.
“The Acorn Project on the Buchan coast must be one of the beneficiaries of this additional investment if we are to transform our region into the net-zero capital of Europe.”
And Aberdeen should be “first in the queue” to become a Scottish “investment zone” proposed by the chancellor, Mr Crighton said.
He added: “This region has proven time and time again that it can work with government and academia to tackle the big challenges facing the UK.”
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