Having had a front row seat for the growth of the UK’s carbon capture and storage (CCS) sector for a number of years now, it is great to see increasing recognition from Westminster of its crucial role in decarbonising British industry. This is especially true for cement manufacturing.
Within the first 100 days of government, both the Prime Minister and Secretary of State for Energy Security and Net Zero have publicly recognised CCS as the only viable option to decarbonise vital, carbon-intensive industries such as cement, upon which so many UK jobs and livelihoods rely.
Earlier this month, I was at the CCSA’s conference in London where Sarah Jones MP, the Minister of State at both the Department for Energy Security and Net Zero and the Department for Business and Trade, repeated the same message – while committing to working with industry to ensure that UK CCS projects are delivered.
Crucially, these aren’t just warm words. The government took a significant step in backing up the positive rhetoric with financial support, announcing £22 billion of funding for the Track-1 CCS projects and thereby signalling a huge vote of confidence in the CCS industry.
CCS will also be an important part of the government’s industrial strategy and, while the positive messages came across loud and clear at its International Investment Summit, so too did the scale of the challenge facing its delivery.
This government has a power of work ahead of it to deliver economic growth and clean energy alongside industrial decarbonisation. The good news is that CCS can support these objectives as a key part of the UK’s decarbonisation pathway for industry, while creating new skilled jobs, protecting existing jobs in foundation sectors and helping meet the UK’s net-zero commitments.
The need for certainty
The UK has enormous potential to be a global leader in CCS, and this isn’t blind ambition – we have all the tools at our fingertips to do it.
The UK has enough total storage capacity to hold two centuries’ worth of its current emissions, and a pipeline of innovative projects capable of capturing approximately 94 million tonnes of carbon dioxide annually – as well as an already world-leading offshore energy sector. We can make the UK’s CCS sector an international success story, but only if we provide the necessary conditions.
Take Spirit Energy’s own Morecambe Net Zero (MNZ) project. It is set to decarbonise 40% of the UK’s cement and lime industry through our work with our Peak Cluster partners. We don’t need another major funding envelope from the UK government. Instead, what we and so many others need is to see simple, pragmatic policy reforms that will bolster investor confidence, incentivise carbon storage and industrial decarbonisation by providing a roadmap for project delivery.
So, what the industry really needs is certainty. Certainty on a route to market for CCS projects, certainty on carbon pricing, and certainty on when all of this will happen.
Creating a clear pathway for technically and commercially mature CCS projects that sit outside the current Track process is critical for providing confidence to investors. Similarly, expanding the National Wealth Fund’s focus to include merchant CCS models can unlock private sector investment and ensure these innovative projects can progress, then contribute to the UK’s net-zero targets.
Establishing a stable and sustainable carbon price under the UK Emissions Trading Scheme will ensure storing emissions is significantly cheaper for industry than emitting carbon, while implementing a Carbon Border Adjustment Mechanism will protect domestic low-carbon products from being undercut by high-carbon imports, ensuring the UK can compete in an increasingly competitive market.
Finally, the government needs to accelerate work on the design of the ‘market transition’ phase of CCS support, for deployment between 2030 and 2035. This will enable potential investors to get their heads around the future business models that will be in place, and more confidently commit capital towards CCS projects in the UK.
It feels like we’ve reached a turning point. This is where we need to transform consensus into collaboration, move understanding to action and turn promising rhetoric into policymaking reality.
It’s up to ministers to build on those welcome words and pave the way for investment to follow.
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