Industry calls on UK to accelerate carbon capture as new projects approved

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The UK energy industry has urged ministers to accelerate their support for the nascent sector to capture carbon emissions after Rishi Sunak pledged on Monday to maximise production of oil and gas.

The call came after the prime minister vowed to continue licensing new North Sea developments to “bolster” the UK’s energy security while also announcing the government would back two new carbon capture and storage (CCS) schemes.

The move doubles the number of projects that have received government backing. The four schemes are designed to establish an industry that will reduce emissions from heavy industries struggling to cut their reliance on fossil fuels.

But executives promoting the technology warned the government was still moving too slowly in developing detailed policy and funding models to ensure CCS can be built at the scale and ensure the nascent sector meets its initial emissions reduction target by the end of the decade.

They also warned recent backsliding by the government on other climate commitments was making it more challenging to develop a carbon capture sector in the UK.

Ruth Herbert, chief executive at the Carbon Capture and Storage Association, welcomed the support for the two schemes — the Viking project on Humberside and Acorn in Aberdeenshire — but said time was “running out” to build the required infrastructure.

“It’s really great to have this momentum but there is still a huge amount to build by 2030,” she said, referring to the government’s target of capturing between 20mn and 30mn tonnes of CO₂ per year by the end of the decade. “Billions of pounds of investment is waiting to be deployed to decarbonise these industrial regions, but firm plans are required to secure it.”

The capture of carbon dioxide emissions from industrial processes, ranging from manufacturing to oil refining, and its planned storage in disused North Sea wells is a key part of the UK’s goal of hitting net zero by 2050, as well as in the continued transition from fossil fuels after that date.

Nick Cooper, chief executive of Storegga, the developer of the Acorn project, said the company was ready to “roll its sleeves up . . . [and] sit down with the government and crack on” to discuss how the state backing for the project would work. Acorn is backed by oil and gas producers Harbour Energy and Shell.

Graeme Davies, director of the Viking project, which is being led by Harbour Energy with backing from BP, hailed the approval of the project as a “major milestone”. He said he was confident it would be capturing carbon by 2030 but warned the scale of the challenge should not be underestimated.

“I think they’re very ambitious targets the government has set and that’s the scale of decarbonisation the UK needs,” he said. “There’s a lot to do — these are major infrastructure projects that take a decade or more to deploy at scale.”

Adam Berman, deputy director at industry group Energy UK, said the long-term viability of carbon capture relied not just on government support but a robust carbon price.

Sunak’s government has come under criticism for failing to reduce the amount of carbon allowances available to emitters as much as expected, while providing additional allowances to heavy industry. This has pushed the UK carbon price down, leaving it at a steep discount to the EU equivalent.

Berman said: “Beyond financing arrangements for individual projects, the future of the UK’s CCS industry relies heavily on a domestic carbon price that incentivises industry to capture carbon rather than simply emit it.”

Herbert of the CCSA said part of the problem was the government had taken too long in developing the detailed policy needed to get a carbon capture sector up and running and ministers were arguably now “recognising that we’re behind”. This had forced the government to take steps to soften carbon prices for fear of damaging industry.

Longer term she said the industry was hopeful the policies would be put in place to strengthen the carbon price.

Speaking on a visit to Scotland, Sunak defended the government’s decision to keep licensing new oil and gasfields while backing CCS. “Even when we’ve reached net zero in 2050, a quarter of our energy needs will come from oil and gas,” Sunak said, arguing it was more secure and cleaner to produce fossil fuels closer to home.

Ministers expect the current 33rd round to award more than 100 licences, starting in the autumn. The round was launched in October and in January it was confirmed that 115 bids had been received.

Sunak has said he remains committed to two big net zero targets: the 2030 date for banning the sale of new diesel and petrol cars and the 2050 target of the UK becoming a net carbon zero economy.