UK Carbon Capture Storage Association calls for timely government funding

The UK Chancellor had promised £1bln a year to its carbon capture utilisation and storage (CCUS) programme.

The funds were announced almost a year ago but final investment decisions have not yet been taken.

The Carbon Capture Storage Association (CCSA) submission emphasises timely delivery of government commitments and clarity on future funding are essential to build investor confidence and secure the full supply chain benefits of CCUS.

Projections suggest that UK CCUS could attract private sector investment of up to £30bln by 2030.

Investment in CCUS is expected to generate 70,000 new skilled jobs and protect 77,000 existing jobs.

CCSA analysis suggests government support will fall away sharply by the mid-2030s as volumes of carbon captured surge towards 50-60Mt annually.

The eight projects covered by the CCUS Programme potentially represent around one-third of the UK’s 2030 target for CO₂ storage.

Some CO₂ storage sites have lead-in times of six to seven years, with three to four years for capture projects, so the report highlights time is of the essence.

The association's budget asks the Chancellor to clarify funding routes by establishing annual revenue support matched to government targets (estimated at £2-3bln annually from 2028 onwards - including the £1bln a year already committed in Spring Budget 2022).

They also request the Chancellor to underwrite deployment levels until CCUS becomes self-sufficient in the 2030s.

Ruth Herbert, Chief Executive of the CCSA says, ‘The proposals and recommendations set out in the CCSA’s Spring Budget Submission reflect a significant opportunity for the UK, not only to meet decarbonisation targets but to retain our supply chain industries and attract new businesses to the UK to take advantage of this infrastructure…Significant progress has been made by the government in 2023, however increased pace and forward visibility are paramount for investor and supply chain confidence.’