- New report shows cost reductions for carbon capture can be achieved by learning from first mover projects, delivering economies of scale, growing UK supply chains and promoting industry collaboration to reduce costs
- Government must act swiftly to deploy CCUS across the UK’s industrial heartlands or risk missing our net zero targets
- The Climate Change Committee see that there is no route to net zero without CCUS
The Carbon Capture and Storage Association (CCSA) publishes cost reduction recommendations, following the Climate Change Committee’s Seventh Carbon Budget Advice, which made clear there is no route to net zero without CCUS.
Today’s report identifies the key levers to deliver cost reductions while scaling up the CCUS sector. This will ensure value for money, whilst delivering economic growth for the UK, achieving net zero and an affordable and secure energy system.
The technology underpins decarbonisation of multiple UK sectors including; clean power generation, low-carbon fuel production, industrial decarbonisation and carbon removals.
Levers include accelerate learnings from first mover projects, delivering economies of scale and maximising the use of infrastructure, growing UK supply chains and promoting industry collaboration to reduce costs.
The Government has already taken significant steps to establish the first two CCUS clusters. This momentum needs to be maintained to deliver the next set of projects so that a critical mass is realised to achieve these future cost reductions.
The most immediate step is to enable CCUS projects to move forward that have already been selected and invested millions of pounds at risk in our industrial heartlands. To do this, Government must commit funding to deliver Track-1, Track-2 and Track-1 Expansion projects, alongside other CCUS projects that deliver on the same timescales.
The report outlines three further key recommendations for the Government to act upon that will enable cost reductions to be realised by industry. These include:
- Refine the approach to future funding allocation: Learning from Track-1, the next phase of CCUS funding must improve the risk-sharing between parties and optimise the full value chain; from supply chain – CO2 capture project – transporting the CO2 – permanent CO2 storage, without any delay to the allocation process. The Government must also commit to regular future allocation rounds, as we saw in offshore wind, to signal the scale and timing of future opportunities to investors, industry and the supply chain, which will drive down costs.
- Accelerating delivery of comprehensive carbon markets both in the UK and internationally: The UK must efficiently implement its planned expansion of the UK Emissions Trading Scheme (ETS), introduce a UK Carbon Border Adjustment Mechanism (CBAM), and develop cross-border CO2 transport and storage markets. Strong support should also be given to protect sectors from carbon leakage, especially those not covered by the proposed UK CBAM.
- Leveraging public finance through GB Energy and National Wealth Fund: Targeted public finance mechanisms should be used to de-risk first-of-a-kind projects, ensuring sustainable funding that attracts further private investment in the medium to longer term.
Acting now on these recommendations will establish an industry that provides energy and low carbon product security as well as delivering substantial economic growth. The CCUS industry is projected to create 50,000 skilled jobs, unlock £94 bn of cumulative GVA in the UK and CO2 storage exports generate potential revenues of?£30 billion per year – all by 2050.
Mark Sommerfeld, UK Director, said:
'Establishing a strong CCUS industry involves delivering cost reductions as the sector grows. To this end, the CCSA, with our members, has identified key levers that will drive down costs over time as more and more projects are delivered.'
'Getting spades in the ground for the first CCUS clusters will provide other projects with important lessons and work towards strengthening the value chain. This is critical as we work to achieve economies of scale that will foster innovation and promote collaboration in contracting and supply chains. In doing so, we will be able to realise efficiencies and strengthen investor confidence in the industry, ultimately lowering the cost of delivering and operating CCUS across the UK’s industrial heartlands.'
'Government policy plays a crucial role in shaping this future. Implementing the recommendations in this report will reinforce the economic case for CCUS and activate these levers. Most importantly, the Government must sustain momentum by providing long-term certainty and commit funding to the already-selected CCUS projects and the broader pipeline. Companies have already invested millions in the UK’s industrial heartlands and require policy certainty to see the CCUS industry really take off. Acting now will not only reduce costs in the future but also cement the UKs position as global leader in CCUS.'?
About the CCSA
CCUS, or Carbon Capture, Utilisation and Storage, is a key low carbon solution – vital to meeting the UK’s statutory Net Zero target at least cost. CCUS enables industrial decarbonisation as well as the production of clean power, clean products (such as cement and chemicals) and clean hydrogen – which can also be used to decarbonise industry. In addition, CCUS also enables greenhouse gas removal from the atmosphere through Direct Air Capture with Storage (DACS) or Bioenergy with CCS (BECCS).
The CCSA is the trade association accelerating the commercial deployment of CCUS, with offices in the UK and Belgium. We work with members, governments and other organisations to ensure CCUS is developed and deployed at the pace and scale necessary to meet net zero goals and deliver sustainable growth across regions and nations.
The CCSA currently has over 120 member companies who are active in exploring and developing different applications of carbon capture and removals, CO2?transportation by pipeline and ship, utilisation, geological storage, and other permanent storage solutions, end-users in the power, industry, waste management, fuels, and hydrogen production sectors, plus supply chain, engineering, construction and management, legal and financial consulting sectors.
For media enquiries please email?press@ccsassociation.org
Source: CCSA
