With UK’s 2030 CCUS targets being ‘very challenging,’ three measures can save the day
As part of its effort to speed up decarbonisation, the UK has set ambitious carbon capture, usage, and storage (CCUS) targets. However, Wood Mackenzie – a global insight business for renewables, energy and natural resources – believes the country will struggle to meet these targets unless government and private investment come to the aid in this endeavour and turn the promising policy into a success.
Wood Mackenzie underlines that the global CCUS project pipeline is buoyant but scaling up needs concerted and consistent effort from governments. According to Mhairidh Evans, Head of CCUS Research speaking at Offshore Europe taking place in Aberdeen, only a handful of countries have policies and regulations ready to adopt CCUS today and the United Kingdom is one of them.
“CCUS is a rising global industry. There will of course be hurdles along the way, but companies should be ready to ride the megatrend. Mostly, the technical workstreams are running ahead of the commercial and regulatory ones. And there’s still a lot to do to bring emitters onboard,” explained Evans during her presentation at Offshore Europe.
However, Wood Mackenzie’s analysis shows that the UK’s target to capture and store 20 – 30 million tonnes per annum (Mtpa) of CO2 by 2030 looks “very challenging” with some companies not able to progress projects due to a slowdown in the negotiations for government funding.
In a bid to shed some light on what is needed for the UK to meet its 2030 targets, Evans highlights three conditions that need to be met if 2030 targets are to remain in sight. The first one says that the UK government needs to accelerate funding processes while private investment needs to flow quickly afterwards.
Based on Wood Mackenzie’s estimates, delivering the first four CCUS clusters will cost £65 billion and will capture and store more than 500 million tonnes of CO2 over their respective operational life cycles. Therefore, the government’s commitment of £20 billion towards that is critical in unlocking the remainder of private investment.
The second condition points out that companies need to execute transport and storage projects within a compressed schedule. Four CO2 transport and storage hubs – East Coast Cluster, HyNet, Acorn, and Viking – will form the heart of the UK’s CCUS clusters.
While technical and commercial preparations have been ongoing, Wood Mackenzie underlines that none of these projects have taken a FID yet, thus, the challenge for these projects will be to build large-scale infrastructure in ever-shorter timelines. There are few precedents for this type of project elsewhere in the world.
The third condition outlines that emitters across multiple industries need to apply carbon capture technically and economically. There are close to 60 different emitting facilities that have announced an intention to apply carbon capture before 2030, which range from large-scale power-generating facilities to cement production and small biofuel facilities.
“The diversity of industry appetite is impressive and a testament to net-zero ambitions. But the barriers stand high and only eight projects have been selected so far. The challenge for these emitters comes in applying costly novel technology. And the complex government funding models which can address this seem difficult to access,” emphasised Wood Mackenzie.
Moreover, the North Sea Transition Authority (NSTA) outlined in its recent report that the oil and gas industry was making progress on curbing emissions with the reduction in 2022 achieved for the third year in a row despite the increase in production. However, more action is required to halve emissions by 2030, as agreed in the North Sea Transition Deal (NSTD).
Evans concludes: “The UK’s CCUS targets are among the most ambitious in the world. Delivering them was always going to be a big ask. High ambitions are needed, and a missed target shouldn’t necessarily be viewed as a failure.
“This is about building technology and infrastructure to reduce industrial emissions for decades to come. Ultimately, the UK has all the right ingredients and is going in the right direction. We just need to go a bit faster.”