The Scottish government will provide £2.5 million while the Department of Energy and Climate Change (Decc) will contribute the remaining £1.7 million to allow extensive industrial research into the design and construction of the proposed Caledonia Clean Energy project.
Over the next 18 months, a scrupulous programme of research and development work will advance the engineering design of the project and the findings will be shared across industry and academia to improve understanding of CCS deployment.
Energy secretary Ed Davey emphasised that CCS could be “crucial in helping us meet our ambitious climate change goals”.
“The UK government is leading Europe with its support of the two competition projects at Peterhead in Scotland and White Rose in Yorkshire,” he said. “Developing CCS more widely is vital if it is to become cost-competitive technology, and I’m excited at the prospect of Grangemouth contributing to the UK’s low carbon future.”
The proposed CCS plant would be fitted with technology designed to capture 90 per cent of its CO2 emissions. This would be transported via existing on-shore pipelines and existing sub-sea pipelines for permanent geological storage 2km beneath the North Sea.
This would be the first time coal-gasification, in which coal is chemically transformed into synthetic natural gas, and CCS technologies would be integrated in a single facility.
A study conducted by Element Energy on behalf of Scottish Enterprise in June last year, revealed that the development and deployment of CCS could be worth up to £7 billion to the Scottish economy over the period until 2050.
In the same month, the UK’s CCS research centre awarded £2.57 million to fund research and development bodies to drive innovation in the sector.
In July, the Labour Party pledged to make a string of reforms to get the CCS industry “back on track”, including the use of the technology in decarbonising emissions intensive industries.
At the end of last year, Decc signed a joint agreement with Canada’s Department of Natural Resources, to work together on research and knowledge sharing surrounding CCS.