The government has provisionally chosen the first net-zero industrial clusters to receive funding for the construction of carbon capture and storage (CCS) infrastructure.
In a statement to parliament, energy and climate change minister Greg Hands revealed that the East Coast and HyNet North West clusters have been selected as the two “track 1” clusters it is aiming to get up and running by the mid-2020s.
The prime minister’s ten-point plan committed to provide £1 billion of funding to support the deployment of CCS infrastructure at two industrial clusters by the mid-2020s and a total of four by 2030 at the latest.
Hands said the Department for Business, Energy and Industrial Strategy (BEIS) has now completed the first phase of assessment for its CCS Infrastructure Fund, selecting the East Coast and HyNet clusters from five submissions to enter track 1 negotiations.
Funding will be subject to final approval by ministers based on value for money for consumers and taxpayers. The Scottish cluster based around the St Fergus gas terminal near Peterhead has been selected as a backup in case either of the track 1 projects is dropped.
Commenting on the announcement on Tuesday (19 October), Ruth Herbert, chief executive of the Carbon Capture and Storage Association (CCSA), said: “The UK has today taken a significant step towards meeting its net zero target, by selecting the first projects that will start capturing and storing carbon dioxide in the mid-2020s.
“These first clusters will showcase the breadth of applications for CCS, including industrial decarbonisation, clean hydrogen production and greenhouse gas removal, and will make a significant contribution to regional growth and levelling up in some of the UK’s key industrial heartlands.”
The East Coast cluster is an amalgamation of the originally separate Zero Carbon Humber and Net Zero Teesside projects.
Last year, BP, Eni, Equinor, National Grid, Shell and Total Energies formed the Northern Endurance Partnership to construct the infrastructure to transport carbon emissions from both clusters to storage in the Endurance saline aquifer under the North Sea.
Andy Lane, managing director of the Northern Endurance Partnership, said: “Today is a significant milestone on our country’s journey to net zero emissions by 2050.
“We are delighted that the East Coast cluster has been selected and we will look forward to delivering our project, removing up to 50% of the UK’s industrial cluster CO2 emissions, creating tens of thousands of jobs and establishing the UK as a leader in the energy transition”.
As well as serving industrial emitters and power stations, the CCS networks for Zero Carbon Humber and Net Zero Teesside are expected to facilitate the production of blue hydrogen by reforming natural gas. The hydrogen will be supplied to industrial users via pipelines taking many of the same routes.
As part of Zero Carbon Humber, Equinor is planning to build a blue hydrogen production plant at the Saltend Chemicals Park that would additionally supply Keadby Hydrogen – a “first-of-a-kind” hydrogen-fuelled gas turbine power station that it is developing in partnership with SSE. They are also working together to develop natural gas-fuelled power station called Keadby 3 that would be fitted with carbon capture technology.
Stephen Wheeler, managing director of SSE Thermal, said: “As we look ahead to COP26, today’s announcement marks a significant step in the UK’s journey to net zero, kick-starting plans to sustainably decarbonise industrial heartlands in the North of England.
“If the UK is serious about leading the way on climate action, developing carbon capture and hydrogen infrastructure will be crucial in decarbonising the harder-to-reach sectors of the economy, while ensuring a just transition for workers and communities.”
The CCS network for Zero Carbon Humber would run all the way to Drax’s plant in Selby where it is planning to capture emissions from its biomass units as part of its efforts to create the world’s first “negative emissions” power station.
Drax Group chief executive Will Gardiner said: “Drax’s bioenergy with carbon capture and storage (BECCS) project will play a vital role in the East Coast Cluster, enabling the UK’s most carbon intensive regions decarbonise, helping the UK to reach net zero.
He said: “The first BECCS unit at Drax could be operational in 2027, delivering the world’s largest carbon capture project, permanently removing millions of tonnes of CO2 from the atmosphere and playing a vital role in the fight against the climate crisis.”
Uniper is also planning to build a “hydrogen hub,” combining blue and green hydrogen production, at the site of its Killingholme power station, whilst BP is planning to build a blue hydrogen plant as part of Net Zero Teesside.
BP’s senior vice president for Europe and head of country for the UK, Louise Kingham, said: “Teesside and the Humber were once the industrial heart of the UK. Today’s announcement paves the way for them to become the green heart of the country’s energy transition, shepherding in the next generation of industry and ways of working.”
As the name suggests, the HyNet North West project in the North West of England and North Wales is similarly aiming to enable the production of blue hydrogen to supply to industry and the power sector, whilst also capturing their carbon emissions.
Cadent is additionally planning to supply hydrogen to homes and businesses, initially by blending it with natural gas in its distribution network.
HyNet North West project director David Parkin said: “HyNet is led by the demand from organisations and stakeholders across the North West of England and North Wales, who all want to reduce carbon emissions to Net Zero.
“From as soon as 2025, the project will enable our manufacturing sector across the region to decarbonise, as well as providing the opportunity to transition the way we travel and how we heat our homes.”
He continued: “The project partners are ready to deliver and, as one of the first industrial decarbonisation clusters, we will play a big part in shaping the country’s hydrogen economy, positioning the UK as a global leader in the sector.
“We are looking forward to working closely with government and the other clusters to deliver and grow the infrastructure as rapidly as possible, both in breadth and depth, over the coming years.”
Cadent head of future networks Damien Hawke said: “It’s only three-and-a-half years ago that we first went public with HyNet North West. What’s happened since that launch event in Manchester has been nothing short of amazing.
“We’ve seen the North West embrace the opportunity to be first, coming together to make happen a project that’s going to decarbonise heavy industry. If this enthusiasm and government support holds firm – which it must – the consortium we’re part of can make this happen by 2025 and start making huge carbon savings.”
Herbert said it is now critical that the government provides clarity over the long-term rollout of CCS: “If we are to achieve our climate goals, and the Climate Change Committee’s target of capturing 22 million tonnes of CO2 per year by 2030, the industry and wider supply chain need a clear line of sight to the future delivery of CCS across the country,” she added.
“Ahead of next week’s spending review, we are calling for the government to introduce a delivery plan for CCS – setting annual spending budgets over the next decade to give the industry certainty to invest in projects now.
“As the UK prepares to host COP26 in November, we believe this commitment will send a strong signal that the UK is serious about meeting the Paris Agreement and becoming a global leader in this crucial planet-saving technology.”