The UK government has earmarked new funding to support carbon capture, utilisation and storage and (CCUS) projects as part of the country’s Spring Budget announced on Wednesday.
“I am allocating up to £20 billion [$24.3 billion] of support for the early development of [carbon, capture and storage], starting with projects from our East Coast to Merseyside to North Wales, and paving the way for CCUS everywhere across the UK as we approach 2050,” UK Chancellor of the Exchequer Jeremy Hunt said in a speech in the House of Commons.
Hunt described CCUS as “another plank of our green economy”.
Hunt said the funding will support job creations, with up to 50,000 private-sector jobs, and drive capture of carbon dioxide emissions of 20 million to 30 million tonnes per annum by 2030.
Under the CCUS Cluster Sequencing Process, the UK has a target to deploy two CCUS clusters by 2025, and two more by 2030.
HyNet and the East Coast Cluster — in England’s northwest and northeast coast, respectively — were shortlisted last August and a first blueprint of their business model released in November.
Progress in the government-led Cluster Sequencing Process has stalled in recent months due to political chaos in Westminster, delaying critical investment decisions on projects as companies saw jurisdictions in northern Europe and the US moving faster.
On that point, the Spring Budget document released today states that a shortlist of projects for the first phase of CCUS deployment “will be announced later this month”.
The document mentions an expansion of projects under Track 1 taking place this year, and additional clusters to be selected for Track 2, with “details announced shortly”.
Ruth Herbert, chief executive at the Carbon Capture & Storage Association (CCSA) industry group, said today’s announcement is “a turning point” for the sector and gives “much-needed certainty to investors” looking to further CCUS projects in the UK.
“We can now move forward with implementing the initial CCUS clusters,” she said.
Hunt also gave new impetus to revive the UK’s ambitions for making nuclear power a centrepiece of its energy transition and security strategy.
Nuclear power was reclassified as “environmentally sustainable” like renewables, potentially giving it access to wider investment incentives.
Hunt said he will set up a scheme called Great British Nuclear aimed at reducing costs in the sector and get it to a point where it supplies 25% of UK power by 2050.
He also launched a competition to run the nation’s first small modular reactors.
“The long-term solution is not subsidy but security and that means investing in domestic sources of energy,” Hunt said.
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