Government Commits £22 Billion to Carbon Capture Projects

Prime Minister Keir Starmer (L) speaks as Energy Security and Net Zero Secretary Ed Miliband (C) and Chancellor of the Exchequer Rachel Reeves (R) listen during a visit to a manufacturing facility in Chester, England, on Oct. 4, 2024. Darren Staples/PA Wire

The government has committed £21.7 billion for projects to capture and store carbon emissions from energy, industry, and hydrogen production at two sites in the industrial heartlands in the north of England.

The funding available over the next 25 years will be used to develop three projects in Merseyside and Teesside, which are expected to directly create 4,000 new jobs and support 50,000 jobs as the sector matures into the 2030s, as well as attract £8 billion in private investment.

The government also said that the measures “support acceleration to net zero,” beginning a “new era for the clean energy industry ... in the week Britain became the first industrialised nation to end its 150-year usage of coal.”

The projects will remove over 8.5 million tones of carbon emissions each year, which the Department for Energy Security and Net Zero (DESNZ) says is the equivalent of taking around four million cars off the road.

Announcing the plans in a government statement on Friday, Prime Minister Sir Keir Starmer said, “We’re reigniting our industrial heartlands by investing in the industry of the future.”

“Today’s announcement will give industry the certainty it needs—committing to 25 years of funding in this groundbreaking technology—to help deliver jobs, kickstart growth, and repair this country once and for all,” Starmer added.

Carbon Capture, Utilisation, and Storage

Carbon capture, utilisation, and storage (CCUS) is a process that captures carbon emissions from industrial processes and from burning fuels for energy before they reach the atmosphere.

It then uses or transports that carbon to be stored permanently underground, such as in disused oil fields under the sea bed. The technology has been used around the world for the past two decades.

Funding will also support transport and storage networks, which will take the carbon and store it under Liverpool Bay and the North Sea. The government says the UK has enough capacity to store 200 years’ worth of emissions. Carbon dioxide storage will begin from 2028.

The process is also used in the production of blue hydrogen, which is made from natural gas with emissions captured and stored, making it “low-carbon.” DESNZ says the project will pave the way for the UK’s first large-scale hydrogen power plant.

Discussing the plans at a glassmaking factory in Cheshire, Starmer said, “I’ve always believed that clean energy is a golden opportunity for our country, a chance to bring security and hope to working people, relight the fires of renewal in those areas that got hit so hard by deindustrialisation.”

“I’m really pleased that we’re putting ourselves in a position not just to be in that global race, but to win that global race and that’ll be measured in thousands of jobs for literally decades to come,” he added.

De-Industrialisation for Net Zero

The Conservative Party had also planned on launching carbon capture clusters, with Shadow Energy Secretary Claire Coutinho saying “it’s thanks to the Conservatives that funding was already announced for these projects in the Spring of 2023.“ Coutinho also acknowledged local leaders, like the Conservative mayor of Tees Valley Ben Houchen, who had worked ”for years” on these projects.

“But whilst this is undoubtedly good news for Carbon Capture jobs, this will not make up for the mass deindustrialisation pathway that Ed Miliband’s costly net zero and energy policies are leading us to, with the devastating impact of his zealotry on jobs already seen in steel-making, refineries and in the North Sea,” she added.

Monday saw the end of the UK’s 142-year history of using coal to make electricity, with the closure of Ratcliffe-on-Soar power station near Nottingham, in line with government policy to end coal-fired power generation.

Tata Steel's Port Talbot steelworks in south Wales on Sept. 15, 2023. Ben Birchall/PA Wire

That same day, blast furnaces at Tata Steel’s Port Talbot mill shut down, marking an end to the traditional method for making steel in Wales. The system will be transitioned in the next few years to an electric arc furnace.

Unions have criticised de-industrialisation for net zero. Gary Smith, leader of the GMB union, said last month after the government agreed a £500 million package for Tata Steel’s green transition, “We really have to stop this decarbonisation through de-industrialisation.”

Ratcliffe-on-Soar Power Station, the UK’s last coal-fired power station, on Sept. 13, 2024. Jacob King/PA Wire

“Serving up P45s to working-class people, hollowing out working-class communities, is not the way to decarbonise this country,” Smith added.

Last month also saw the announcement that Scotland’s only oil refinery will close, resulting in 400 jobs lost. Unite union’s General Secretary Sharon Graham called it an act of “industrial vandalism,” saying, “the road to net zero cannot be paid for with workers’ jobs.”

PA Media contributed to this report.