Accelerating Interest in the UK's Carbon Capture and Storage Plans

As the UK prepares for hosting the COP26 climate change sessions in 2021, the UK government has pledged to invest £12 billion (~$16 million) in a 10-point green industrial revolution action plan. This plan supports the country’s quest to achieve carbon neutrality by 2050, which is part of the UK’s legally binding net-zero commitment. At the forefront of this ambitious action plan are investments in carbon capture and storage, hydrogen, and advanced nuclear technology. 

The Business Case for Carbon Capture and Storage

Carbon capture, utilization, and storage (CCUS) technologies involve the capture, use, and storage of CO2 from fuel combustion and industrial processes. CO2 is used as a feedstock to create products or services or is permanently stored underground in geological formations. Although CCUS is not a new concept, the recent interest and accelerated investments in climate targets and decarbonization plans have created an attractive business case for the technology around the world. One of the key applications of CCUS is to capture CO2 emissions from a range of heavy industries, including fertilizer, power station, steel, cement, and chemical plants, and to unlock the potential of hydrogen.

CCUS Technology

(Source: Guidehouse, created in collaboration with the 
European Institute of Innovation and Technology Climate-Knowledge and Innovation Community)

Earlier this month, BP announced its plan to lead a consortium of energy companies, including Italy’s Eni, Norway’s Equinor, UK’s National Grid, the Netherlands’ Royal Dutch Shell, and France’s Total, to capture CO2, compress it, and pipe it into the North Sea to be injected into spent oil reservoirs, effectively trapping it. This net-zero Teesside project is estimated to store 10 million tons of CO2 by 2030 and has received a share of the government’s £200 million (~$267 million) CCUS funding. 

CCUS Has Significant Potential

According to the International Energy Agency, CCUS projects could reduce global CO2 emissions by almost a fifth and reduce the cost of tackling the climate crisis by 70%. Although there are still only 30 projects in commercial use worldwide, in the past 3 years, plans for more than 30 commercial carbon capture facilities have come forward, representing a potential investment of about $27 billion. Although most of the proposed CCUS projects are in the US, Canada, and Europe, other countries and regions, including Australia, China, Korea, the Middle East, and New Zealand, are also looking to develop CCUS infrastructure. 

Increased policy support, declining costs, and technological advancements for carbon capture, removal, and use will generate new business models that can improve the financial viability of CCUS. Investors and policymakers also increasingly support the development of new infrastructure to ensure safe storage of CO2 where applicable. Therefore, the UK’s supportive policy arrangements and encouragement of investments in research and innovation could be the forefront of a new wave of climate technology deployment with the job creation and economic growth that will come with it.