Budget 2023: Will the UK capture the carbon capture market?
“No one country has yet captured the carbon capture market”
Jeremy Hunt, Chancellor of the Exchequer
Yesterday’s budget included £20 billion in funding for the early deployment of carbon capture, utilisation and storage (CCUS). The UK government believes the funds will unlock investment and jobs across the UK – and I agree. The UK has a competitive advantage in the carbon capture field and the government needed to kick off its response to the Inflation Reduction Act in the US to ensure this advantage is not lost.
We are a British business, UK headquartered and now the largest employer of a skilled industrial carbon capture workforce in the country. We applaud the shift in ambition from the UK government – it reflects the reality that we at Carbon Clean have been championing for over ten years: CCUS is simply a necessity to reach net zero.
Now that the finance has been committed we are interested in how the UK government, industry, and investors can pull in the same direction to ensure the CCUS sector grows at the pace and scale seen by the solar and offshore wind industries in the last decade. We have the technology – modular, cost-effective carbon capture exists, and it’s taking CO2 out of hard-to-abate industrial sites as we speak. So, beyond the tech and capital, what do we need?
A taskforce at the centre of government
Drive is high on the list of requirements. Yesterday’s Budget announcement showed great ambition. We must ensure momentum isn’t lost and the capital is quickly and correctly deployed. Carbon capture is of paramount importance to achieve industrial decarbonisation. I would like to see a UK government carbon capture team or taskforce created within the new Department for Energy Security and Net Zero that has a key focus on heavy industry. This team/unit would be a central point of contact for resolving permitting issues, facilitating partnerships, and building a UK-based supply chain.
Upskilling the UK
The UK is an engineering superpower – many of the FTSE 250 constituents have roots as engineering companies. CCUS is a new sector. When my co-founder Prateek set out, there was no playbook – we worked in collaboration with leading academics to develop it from scratch.
We must upskill existing minds across the energy and industrial sectors and ensure the best and brightest want to stay in the UK and contribute to the country’s journey to decarbonisation. The Chancellor acknowledged the job creation potential of CCUS in the Budget and the sector has calculated that CCUS could create more than 70,000 new jobs by 2027 and safeguard the same number of existing jobs in carbon-intensive industries for the decades ahead as global demand shifts to low carbon products.
A broader vision
Finally, we need to consider all aspects of CCUS. We have the capture technology, but once CO2 is captured it must be transported and stored.
Quite rightly, the £20 billion of funding is being deployed to support existing clusters. The government has industrial cluster projects in motion, many of which we’re involved in, and we do need to see faster movement. But, government support should also extend to developing transport infrastructure for industrial sites that are located far from these clusters or hubs – dispersed sites. More also needs to be done to support dispersed industrial manufacturers to decarbonise and start their journey towards a low-carbon future.
Additionally, we need the government to consider all means of accelerating CCUS deployment if we are to achieve the pace of rollout needed to achieve net zero goals. This includes exploring new carbon capture business models. One such model is Carbon Capture as a Service (CCaaS) which offers emitters a full end-to-end carbon capture offering from capture, to transport, to storage, for a flat fee – it is going to be a game changer for many.
Yesterday’s announcement was a big leap in the right direction. To capture the carbon capture market, the UK must now take a series of steps - assign responsibility for delivery, avoid too narrow a focus, and ensure the workforce of today is adequately equipped to grow the emerging industries of tomorrow.