Capital investment in carbon capture utilisation and storage (CCUS) projects in the UK could reach £41bn by the end of the decade, opening up a huge opportunity to rapidly develop a strong domestic supply chain that can support UK jobs and economic growth, a new industry report today argues.

The Carbon Capture and Storage Association (CCSA) said expenditure on CCUS infrastructure, including hydrogen production and greenhouse gas removal projects, was set to surge over the coming decade in response to UK climate targets, including the recently adopted goal to slash emissions 78 per cent against 1990 levels by 2035.

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In a report published today, the trade body estimated CCUS investment in the UK could reach £41bn by 2030, but that with strategies to support domestic companies, the UK could also develop a supply chain that supports domestic jobs and local manufacturing of related products and goods.

A strong domestic supply chain for the CCUS industry would deliver significant benefits for regional economies in the UK’s industrial heartlands, where a number of zero carbon cluster proects are currently being pursued bringing together heavy industrial, CCUS, and hydrogen production sites, it said.

Olivia Powis, head of the CCSA’s UK office, said taking the opportunity to build up a domestic carbon capture supply chain would boost UK prosperity and support the government’s ‘levelling up’ agenda.

Moreover, she said it would unlock significant market opportunities for UK companies in a global CCUS market estimated to be worth hundreds of billions of pounds by mid-century.

“Due to geographical advantages and world-leading skills and expertise, the UK has a unique opportunity to become a global leader in the development of CCUS,” she said. “The next decade will be critical for CCUS deployment and by implementing the recommendations in today’s report, we have the opportunity to create a strong UK supply chain, providing significant domestic jobs and growth.”

Around 85 per cent of the expected £41bn expenditure over the next decade is estimated to focus on onshore power generation, industrial capture, and hydrogen production plants, according to the report.

High carbon industries and industrial cluster areas will also require new skills to develop and operate CCUS projects, underscoring the need to retrain existing workers and attract new talent into the sector, the report argues.

As such, the report urges the burgeoning CCUS industry and companies involved in developing net zero industrial clusters to develop strategies setting out their equipment, material, technological, staffing, and skills requirements over the coming decade, and outlining how to prepare for the transformation ahead.

The trade body itself said it would undertake an comprehensive assessment of the industry’s current and future capacity, technical excellence, and cost effectiveness in a bid to help “avoid future bottlenecks” in the development pipeline.

Moreover, CCSA said operators in the sector needed to coordinate closely with each other, as well as with government, to ensure smooth and effective delivery of a robust domestic supply chain.

The report came as the CCSA named its new CEO earlier this week, announcing on Wednesday that Ruth Herbert has been appointed to take over the reins at the trade association from October 2021.

Currently director of strategy and development at the Low Carbon Contracts Company, which manages the government’s Contracts for Difference clean power subsidy scheme, Herbert boasts a raft of experience in energy policy in the UK. Her previous roles include several posts at the government’s former Department for Energy and Climate Change (DECC), where she worked on electricity market reform, the 2010-11 Energy Bill, and carbon capture policy, the CCSA said.

“I am extremely excited to be joining the CCSA at such an important time,” Herbert said. “CCUS is a vital solution to deliver net zero across the economy. I look forward to working with the CCSA team and its members to build this critical industry and bring forward a successful CCUS programme to achieve UK climate goals.”

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