Industry Needs to Embrace CCUS to Reach Net-Zero and Remain Competitive

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On Thursday 2 May 2019, the Committee on Climate Change (CCC) published a report outlining how the UK can reach Net-zero emissions by 2050.[1]A key component of the plan is the widespread adoption of carbon capture usage and storage (CCUS), however, a lack of policy and financial backing calls into question the likelihood of this happening soon. Industry needs to persuade Government to fully support CCUS to ensure they can secure funding and remain relevant despite climate change concerns.

Investment is dependent on further Government commitment

A series of government U-turns means that there are only 18 large scale CCUS facilities in commercial operation. CCUS’ significance was first recognised in 2003,[1] however, successive governments have failed to develop large scale projects. Two demonstration competitions have been cancelled; the first in 2011 and the second in 2016. This lack of commitment has created an atmosphere of uncertainty and discouraged investment. It is for this reason that Chris Stark, Chief Executive of the CCC, emphasised the need for a future plan. Speaking to the BEIS Committee,[2] he stressed that a future plan would reassure investors, raise capital and increase confidence in the technology.  Fatih Birol, Director of the International Energy Agency made similar comments about the energy market as a whole, saying ‘bolder decisions required to make the energy system more sustainable. Government leadership is critical in order to reduce risks for investors in the emerging sectors that urgently need more capital to get the world on the right track.’[3]

CCUS benefits both business and Government

In 2018, the Global CCS Institute highlighted that ‘currently the world is way off track in meeting the Paris Agreement climate goals’ and that ‘it cannot get back on track without CCS’.[1] As climate change climbs the political agenda, carbon-intensive industries will be faced with a choice between reducing emissions or being side-lined. The Government may need CCUS to help maintain its traditional industries. UK manufacturing alone employs 2.9 million people.[2] Should decarbonised power not rollout at large enough scale, at quick enough pace, it could force manufacturing, or other energy intensive, industries to close. This would be a severe blow to the UK economy. Government needs to be reminded that supporting CCUS would not only benefit industry but also the country as a whole.

Action required now to maximise benefits

As Paris climate target deadline approaches, demand for CCUS is likely to increase. If UK business lobbies the UK Government to support CCUS now, this country can develop an early-mover advantage, gain a competitive edge and profit from this new technology. Current governmental inaction is preventing the UK benefiting from early adoption. The UK’s ability to profit from CCUS imports (by providing carbon dioxide storage to neighbouring countries) is already being threatened by North Sea competitors. The Port of Rotterdam is aiming to store two million tonnes of carbon dioxide a year from 2021. This should be treated as a decision point to government, with business strongly making the case that unless the UK pledges to at least match this target we are likely to lose any potential head start.

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[1] Global CCS Institute, Global Status of CCS 2018, November 2018, Link.

[2] Office for National Statistics, EMP13: Employment by industry, 14 May 2019, Link.

[1] Department for Transport & Department for Environment, Food and Rural Affairs, Energy White Paper, February 2003, Link.

[2] Chris Stark, Business, Energy and Industrial Strategy Committee, Clean Growth Strategy and International Climate Change Targets, Oral Evidence, 8 May 2019.

[3] International Energy Agency, World Energy Investment 2019, 14 May 2019, Link.

[1] Committee on Climate Change, Net Zero: The UK’s contribution to stopping global warming, May 2019, Link.



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