Funding secured for Britain's industrial future
Government backs 2 major Carbon Capture projects in Aberdeenshire and the Humber.
- Path to securing tens of thousands of jobs in the North Sea and industrial heartlands for decades to come
- Further investment in Scotland as government’s Plan for Change delivers record settlement for Scottish Government with an extra £9.1 billion over the Spending Review period to deliver public services
- Government meets in full request for initial development expenditure from projects, including funding for the SCO₂T Connect onshore pipeline connecting St Fergus with Grangemouth
Workers in the North Sea and Britain’s manufacturing heartlands will drive forward the country’s industrial renewal, as 2 major carbon capture projects in Aberdeenshire and the Humber receive funding to progress.
It comes as part of the government’s Spending Review, which will see working people across Scotland benefit from significant investment in clean energy and innovation, creating thousands of high-skilled jobs and strengthening Scotland’s position as the home of the United Kingdom’s clean energy revolution.
After years of delay under previous governments, the government has backed UK carbon capture industries with £9.4 billion following the Spending Review, investing in Britain’s reindustrialisation with good, well-paid, skilled jobs for Britain’s engineers, technicians and electricians.
Funding will be invested this parliament to get spades in the ground and accelerate Britain’s global leadership in the technology of the future.
It will also progress the Acorn project in Aberdeenshire and the Viking project in the Humber with development funding, helping provide long-term industrial certainty for working people at the heart of these communities.
Today the government is meeting in full the request for development funding of around £200 million, subject to business case, to prepare the Acorn project for delivery – the first time a government has provided funding of this scale for the projects to proceed.
As the project develops, funding will also provide financial cover for the National Gas SCO₂T Connect project, to repurpose an existing 175 mile gas pipeline, alongside 35 miles of new build pipeline, to allow CO2 captured at Grangemouth to be transported to storage facilities under the North Sea. Industry expects at their peak construction Acorn to support approximately 15,000 jobs and Viking to support 20,000 jobs, including 1,000 apprenticeships – bolstering the proud energy history of 2 industrial heartlands as engines for growth through the Plan for Change.
Energy Secretary Ed Miliband said:
This government is putting its money where its mouth is and backing the trailblazing Acorn and Viking CCS projects.
This will support industrial renewal in Scotland and the Humber with thousands of highly-skilled jobs at good wages to build Britain’s clean energy future.
Carbon capture will make working people in Britain’s hard-working communities better off, breathing new life into their towns and cities and reindustrialising the country through our Plan for Change.
Tim Stedman, CEO Storegga, lead developer of Acorn, said:
We warmly welcome the UK government’s support for the Acorn project and the commitment to development funding that will enable the critical work needed to reach Final Investment Decision (FID).
Building on the momentum from the Track 1 projects and significant private sector investment, this milestone is key not only for Acorn but for establishing Scotland’s essential CCS infrastructure needed to grow and scale the UK’s wider carbon capture and storage industry.
We look forward to working with government in the months ahead to understand the details of today’s commitment, and to ensure the policy, regulatory and funding frameworks are in place to build and grow a world-leading UK CCS sector.
Graeme Davies, Executive Vice President, CCS, Harbour Energy said:
The Spending Review today sends a strong signal that Track-2 and Viking CCS are an infrastructure-led economic growth priority in this Parliament.
We will work with government on the critical steps needed to progress Viking CCS towards a final investment decision, following our completion of Front-End Engineering Design and approval of the onshore pipeline Development Consent Order earlier this year.
Acorn has said its project will safeguard around 18,000 jobs in the North Sea that would otherwise have been lost, including jobs at Grangemouth.
These jobs will be needed to build pipelines to transport CO2 safely and generate low-carbon power to homes and businesses so the British people can have energy security, lower bills and protection from the climate crisis.
The funding accelerates the mission to become a clean energy superpower, with projects set to remove CO2 emissions before they reach the atmosphere and store them away safely, which is crucial to securing Britain’s industrial manufacturing future and tackling the climate crisis. Funding builds on and provides more construction support for 2 more advanced projects in Liverpool Bay and Teesside, which both reached financial close earlier this year.
Today’s funding sets a path to unlocking billions of private sector investment, putting more money into the pockets of hard-working communities in Aberdeen and the Humber – securing their place as a world-leader of net zero and low-carbon industries.
Once Acorn and Viking are operational, combined, they could remove up to 18 million tonnes of CO2 from the atmosphere per year. As well as capturing emissions, carbon capture can also be used to generate low-carbon power, as well as enabling hydrogen power - with the industry expected to support up to 50,000 jobs in the 2030s.
Both projects will now move forward with their proposals with the aim of reaching financial closure later this Parliament, subject to project readiness and affordability.
Notes to editors
Today’s funding delivers on our commitments, having already reached financial investment decisions on 2 projects in Hynet, North Wales and the East Coast Cluster, Teesside which industry expects to deliver 20,000 jobs each at peak construction and assuming full deployment.
Jobs figures were provided to government by industry.
Stakeholders:
Jon Butterworth, CEO, National Gas, said
We warmly welcome the government’s decision to fund a further programme of significant carbon capture projects across the country. As Britain’s national gas network, we share the government’s view on the importance of energy security in bolstering our national security.
National Gas’s SCO₂T Connect Project, an essential component of the Acorn Project and wider Scottish Cluster, will be the key enabler for carbon capture across Scotland by providing the network infrastructure to facilitate industrial decarbonisation at scale and Clean Power.
This milestone investment commitment will set the UK on a path to be a genuine world-leader in carbon capture and storage which will play a pivotal role in securing Britain’s energy, decarbonising our economy and creating the jobs of the future.
Finlay McCutcheon, Managing Director, SSE Thermal, said:
The UK government’s support for the Scottish Cluster reflects a strong commitment to advancing a low carbon future for Scotland and the wider UK.
Peterhead Carbon Capture Power Station is an essential anchor project within the cluster, and this welcome announcement moves us a step closer to delivering this vital project.
Carbon capture technology is essential to achieving the UK’s Clean Power targets, and today’s news highlights the need to deliver clean, low carbon dispatchable power that strengthens energy security in a renewables-led system.
SSE’s Peterhead site is strategically located near North Sea oil and gas infrastructure, which we aim to repurpose for CCS in collaboration with partners Equinor and Acorn. This would create a pathway for job creation and retention in North East Scotland, while accelerating the wider decarbonisation of our industrial clusters.
This marks an important step forward for the future of UK energy infrastructure, and SSE remains committed to working closely with government and industry partners to support the transition to a clean energy future.
Olivia Powis, CEO, Carbon Capture and Storage Association (CCSA), said:
The CCSA welcomes support for CCUS in the Comprehensive Spending Review, with allocation of funding for the build-out of HyNet and the East Coast Cluster and development funding to progress the Acorn Project and Viking CCS.
The commitment to taking Final Investment Decision this Parliament, subject to readiness and affordability, for these clusters is welcome and helps towards giving industry the confidence it needs to move forward with major investments in low-carbon infrastructure.
This is a clear step forward to progressing the next clusters in Scotland and Humber. CCUS is critical to decarbonising our industrial heartlands, supporting clean power and enabling low-carbon hydrogen.
It also plays a key role in protecting and creating thousands of high-quality jobs across the country in critical industries like cement, chemicals and refining, and the power system — all of which are essential for meeting the government’s commitments on new infrastructure and housebuilding.
David Whitehouse, CEO, Offshore Energies UK (OEUK), said:
The support for the next phase of carbon storage projects in Scotland and Humberside is welcome, and an important step towards final investment decisions later in this Parliament. Together Viking and Acorn have the potential to unlock over £25 billion of investment by 2035, creating over 30,000 jobs at peak construction,
These projects will provide the pathway to support the decarbonisation of UK industries and are critical to the governments clean power objectives. We will continue to work with government to detail long-term support required to deliver these projects and unlock the wider UK’s CCS ambition.
Sue Ferns, Senior Deputy General Secretary of Prospect union, said:
Prospect has been calling for further investment in infrastructure and CCUS, particularly in the Acorn and Viking clusters, so this is welcome.
New investment is vital to support jobs and the development of new technology in Scotland, the Humber and other industrial heartlands.
If these projects are successful they can not only help us to hit our emissions targets but will also play an important role in a just transition in the North Sea.
Dr Liz Cameron CBE, CEO, Scottish Chambers of Commerce, said:
The government’s backing for the Acorn Project is a significant endorsement which will help to make the North East a world leader in the low-carbon industry.
This major carbon capture and storage facility puts us on an ecologically more sustainable trajectory and will bolster the region’s economy by creating up to 15,000 jobs in construction and attracting billions in private investment.
Whilst this intervention is undoubtedly welcome, we urge both the UK and Scottish governments to work in collaboration to realise Acorn’s potential in full.
Andy Prendergast, GMB National Secretary, said:
We strongly welcome this announcement that secures thousands of jobs whilst putting Britain’s firmly on the path to net zero. After years of dithering, it’s great to see a government willing to come forward with the investments necessary to protect and decarbonise crucial industries in Aberdeen and Humberside.
Jorge Pikunic, CEO, VPI, said:
We’re delighted that the government has backed the Viking CCS cluster. It’s a pivotal step in establishing CCS as a significant and self-sustaining new industry for the UK, which can deliver tens of billions in private investment.
This will futureproof our industrial heartlands, protect the jobs and communities that depend on them, and create new skills in a sector where the UK can play a leading role globally.
At a time when the government is looking to deliver clean power and economic growth, precious few projects offer both opportunities. Our anchor project in Immingham is one of them; having completed the engineering design as one of the first proposed emitter projects for Viking CCS.
We look forward to seeing further details and working together on the next steps.