UK fund makes first investment in CO2 project to drive industrial renewal

July 7, 2025, by Dragana Nikše

The National Wealth Fund (NWF), the UK’s sovereign wealth fund is making a multi-million equity investment in the development of a project that will store CO2 emissions in the East Irish Sea.

Central Morecambe platform; Source: Spirit Energy

The £28.6 million investment is described as the cornerstone of a £59.6 million equity raise, which also includes investment through a joint venture between Summit Energy Evolution, part of Sumitomo Corporation, and Progressive Energy Peak, as well as the cement and lime producers in the Peak Cluster: Tarmac, Breedon, Holcim, and SigmaRoc.

Spirit Energy is currently converting its Morecambe gas fields in the East Irish Sea to create what has the potential to become the UK’s biggest carbon dioxide (CO2) store. The Peak Cluster pipeline will then transport CO2 emissions captured on its industrial plants across Derbyshire and Staffordshire to be stored by Morecambe Net Zero (MNZ).

While being foundation materials for many UK industries, cement and lime are said to be two of the hardest industrial sectors to decarbonize due to the high levels of CO2 emissions generated in the manufacturing process, which cannot be abated through transitioning to low carbon fuels.

The MNZ project therefore aims to provide a permanent decarbonization solution for this hard-to-abate sector by converting the depleted South and North Morecambe gas fields to provide permanent carbon storage.

The UK’s Energy Secretary, Ed Miliband, said: “This landmark investment will catalyse our carbon capture sector to deliver thousands of highly skilled jobs and growth across our industrial heartlands, as part of our Plan for Change. Workers in the North Sea and Britain’s manufacturing heartlands will drive forward the country’s industrial renewal, positioning them at the forefront of the UK’s clean energy transition.”

NWF said its financing will be used to further develop the Peak Cluster pipeline project through to a final investment decision (FID) as early as 2028, including the completion of front-end engineering and design (FEED) and other studies that underpin the planning consent process.

Once repurposed, the gas fields will be able to accept up to 1 gigaton of CO2 in the project’s lifetime. This is said to be the equivalent of three years’ worth of UK emissions.

The NWF believes its investment will remove some of the barriers faced by private investors to further develop and build the project in the future. As CCS is one of the five priority sectors announced by Chancellor Rachel Reeves, the fund wants to help amplify government policy, and de-risk and accelerate the financing and delivery of these vital projects.

Centrica Group Chief Executive and Chair of Spirit Energy, Chris O’Shea, said: “This landmark first investment in carbon capture by the National Wealth Fund is an important and exciting step forward for the UK’s net zero ambitions, and our plans for Morecambe specifically. By transforming the Morecambe gas fields into the UK’s largest carbon store, Spirit Energy will provide the critical infrastructure needed to decarbonise hard-to-abate industries like cement and lime.”

The Morecambe Hub comprises three fields in the East Irish Sea – North Morecambe, South Morecambe, and Rhyl, covering blocks 110/2a, 110/3a, 110/8a, and 113/27b, in water depths ranging from 17 to 35 meters. Gas from all the fields is processed at Barrow Gas Terminals, which is located near Barrow-in-Furness in Cumbria, before entry into the National Transmission System.

Described as one of the largest gas fields in the UKCS, the Morecambe Hub met 20% of the UK’s domestic gas demand at its peak. Spirit Energy aims for the field to remain in production until the end of the decade.

South Morecambe was discovered in 1974 and was the first to be developed, with production starting in 1985. The field has been developed using seven fixed jacket platforms, including the three-platform manned central processing complex (CPC), four normally unmanned installations (NUIs), and 36 development wells.

North Morecambe was discovered in 1976, with first gas in 1994. The development includes the normally unmanned Drilling and Processing Platform Alpha (DPPA) platform, which acts as the main gathering hub for the area, and ten development wells.

Situated north of the North Morecambe field, Rhyl was discovered in 2009 and started producing in March 2013. It has been developed as a two-well subsea tieback to DPPA.