Transparency data

Track-1 expansion of the HyNet CCUS cluster process Outline Business Case (OBC): accounting officer assessment 2025

Updated 20 May 2026

Project title: Carbon Capture Usage and Storage Programme – Track-1 expansion (T1x) of the HyNet CCUS cluster process.

Main scheme project stage: Outline Business Case approved by PIC in May 2025 and MPRG in July 2025.

Introduction

It is normal practice for Accounting Officers to scrutinise significant policy proposals or plans to start or vary major projects and then assess whether they measure up to the standards set out in Managing Public Money. From April 2017, the government has committed to make a summary of the key points from these assessments available to Parliament when an Accounting Officer has agreed an assessment of projects within the government’s Major Projects Portfolio. 

This Accounting Officer Assessment was made for the Track-1 expansion (T1x) of the HyNet CCUS cluster process Outline Business Case (OBC) which sought approval to enter into negotiations with projects included in the T1x Project Negotiation List (PNL). DESNZ will submit project-specific full business cases, which will include the corresponding accounting officer assessment, before signing any contracts with projects.  The assessment was made by the then Accounting Officer for the Department for Energy Security and Net Zero.  

Background and context

T1x, launched in December 2023, aims to fully utilise HyNet’s Transport and Storage (T&S) infrastructure by taking additional projects into negotiations that can connect via pipeline to the HyNet network by 2030 providing greater cluster value for money and supporting key governmental missions.

DESNZ has concluded its assessment of applications of the T1x process and is taking forward six additional projects into the negotiations phase. These projects have been selected through a rigorous and comprehensive assessment. Their inclusion, alongside the four existing Track-1 (T1) projects, brings the total number of projects now progressing through the negotiations phase to ten.

DESNZ is classifying all projects that are in the negotiations phase to receive support to join the HyNet cluster as either ‘Priority’ or ‘Standby’. Projects are classified as follows:

Priority

• Connah’s Quay Low Carbon Power, Uniper
• Hanson Padeswood Cement Works Carbon Capture Project, Heidelberg Materials
• Hydrogen Production Plant 1 (HPP1), EET Hydrogen
• Ince Bioenergy with Carbon Capture and Storage (InBECCS), Evero Energy
• Protos Energy Recovery Facility, Encyclis

Standby

• Essar Energy Transition Industrial Carbon Capture (EET ICC), EET Fuels
• Hydrogen Production Plant 2 (HPP2), EET Hydrogen / Progressive Energy
• Parc Adfer Energy from Waste Industrial Carbon Capture Project, Enfinium Group Ltd
• Runcorn Carbon Capture Project, Viridor
• Silver Birch, Climeworks UK Ltd

Priority projects represent HMG’s current preferred configuration of emitter projects to join the HyNet cluster.

Alongside Priority projects, HMG announced Standby projects. Standby projects are credible alternatives that provide contingency against Priority projects and could benefit if and when capacity becomes available

All projects’ status, either Standby or Priority, is subject to on-going review, with HMG retaining the ability to update the priority configuration where necessary to deliver DESNZ’ strategic objectives.

Assessment against the Accounting Officer standards

Regularity

The negotiations with projects will be carried out with a view to SoS exercising a number of discretionary powers under the Energy Act 2013 and Energy Act 2023.

Contingent liabilities will be disclosed in the Department’s Annual Report and Accounts, which are laid before Parliament, with additional Parliamentary notification where required under Managing Public Money. DESNZ will submit project-specific full business cases, which will include the corresponding Accounting Officer Assessment, before signing any contracts with projects

The funding cover through to 2029-30 for negotiations has been secured through the Multi-Year Spending Review announced in June 2025.

Overall assessment: My assessment is that the regularity test is satisfied.

Propriety

The T1x OBC was approved by the DESNZ Portfolio and Investment Committee (PIC) on 22 May 2025 and received approval to proceed to the publication of the PNL by the Major Projects Review Group (MPRG) on 4 July 2025.

Programme level governance structures are in place to ensure clear accountability and decision making.

Overall assessment: My assessment is that the propriety test is satisfied.

Value for money 

There is a clear economic rationale, centred around correcting market failures, for government intervention to continue support in the development of a CCUS market in the UK economy. Several market failures have been identified which, without government intervention, inhibit the deployment of CCUS in the UK, and prevent emissions from being reduced at the rate and scale required to achieve Net Zero. Further support for HyNet, through T1x, will contribute to addressing CCUS market failures. 

The cost benefit analysis conducted for the T1x OBC demonstrates that connecting more capture projects to HyNet offers value for money when appraised against a Net Zero consistent counterfactual. This indicates that investment in these clusters offers a cost-effective route to meeting Net Zero targets. 

The benefits of HyNet primarily accrue from carbon abatement. Wider social and economic benefits are also expected to be delivered, such as energy security, jobs and investment across the UK. Connecting more projects to HyNet realises further value from initial investments in CO2 transport and storage, facilitating further carbon abatement and providing the option to deploy CCUS-enabled GGRs in the UK, necessary to meet Carbon Budgets. 

Overall assessment: My assessment is that the value for money test is satisfied.

Feasibility

CCUS delivery is complex and presents technical, financial and operational risks. HMG has put in place mitigations to the risks and assessed the risks to be acceptable relative to other choices. Consequently, the government remains committed to the deployment of CCUS due to the strategic benefits it presents.

Prior to the publication of the PNL, the T1x OBC received an amber rating from a NISTA Gateway 2 review. The review tested the Programme’s readiness to move towards negotiations with projects and provided sufficient confidence in delivery, with all recommendations now being implemented.

The Programme’s delivery function will have overall responsibility for taking projects to FID, including proactive management of risks to government, executing DESNZ’s contractual and financial responsibilities, and driving integration across key decision-makers to address barriers to successful delivery.

Overall assessment: My assessment is that the feasibility test is satisfied, although I note the risk to achieving the full targets.

Conclusion

The DESNZ Accounting Officer considered the assessment of T1x and approved it on 13 June 2025.

I have prepared this summary to set out the key points which informed my decision. If any of these factors change materially during the lifetime of this project, I undertake to prepare a revised summary, setting out my assessment of them.

The summary included in this letter will be published on the government’s website (GOV.UK). Copies of this letter will be deposited in the Libraries of the House and sent to the Comptroller and Auditor General and Treasury Officer of Accounts.

Jonathan Brearley
Permanent Secretary, DESNZ