2.7.2  Re-envisage the CCUS programme across a ten-year investment cycle

409.  Timely cluster delivery is a crucial building block for a successful CCUS industry.310 We heard at the CCUS evidence roundtable that the allocation of contracts has been overly constrained, with industry keen to have a more streamlined process for cluster selection and subsequent phases. This is in part because the process prioritises robustness, value for money and sequencing, over pace and progression. A lack of pace however risks missing the capture targets set out in the British Energy Security Strategy.

"Government [...] needs to align the delivery timing of multiple business models: low carbon hydrogen, transport and storage, and CCS, as often a combination of these are required for investment decisions. In addition, certainty in the timing of future government allocation rounds will be critical. Providing timely visibility of how and when future clusters will be sequenced is necessary in providing the certainty required for investments to progress in what is rapidly becoming an increasingly competitive global landscape." - ExxonMobil311

410.  Leading CCUS stakeholders such as the CCSA and Shell have told us that the lack of a clear route for deployment beyond Track 1 clusters, and phase 1 projects within these clusters, could damage the UK's progress.312 They have also said that the lack of clarity around clusters beyond Track 1, and a plan beyond 2030, is supressing investor action due to significant uncertainty on future demand.

411.  There is also specific uncertainty around the growth of CO2 storage. The capacity for transport and storage networks to accept CO2 from dispersed sites and international sources will be vital for our long-term objectives of achieving our Carbon Budgets and net zero. There is currently very little regulatory clarity around cross-border CO2 transport and storage activities313, and there is "material uncertainty over the process [transport and storage] will follow to develop new storage capacity".314

412.  Attracting investment into storage sites, which have a six-to-ten-year lead time, requires government signals and a clear route to market. However, stakeholders have voiced concern that there was little market incentive for storage investment, in part because cluster selection is so slow such that there isn't clear visibility of demand.315

413.  In 2023, government must therefore work rapidly to re-envisage and implement a clear CCUS roadmap, showing the plan beyond 2030. This should take the form of ten-year investment cycles and be used to inform the overall R&D roadmap that is covered in Pillar 6.

414.  We have seen that speed of deployment is a key value driver in ensuring CCUS is realised in the UK. As part of the roadmap, government should take a pragmatic approach to cluster selection. This means allowing the most advanced clusters to progress more quickly, recognising that the roll out of 'first of a kind' projects will carry a degree of risk.

415.  Publishing a longer-term delivery plan will send clearer signals to attract investment. The roadmap should include:

•  Approach to confirming the pipeline of capture projects, at least up to 2030, that will receive future funding, not limited to Track 1 cluster locations. In doing so, it should set out the process and timeline for Track 2 cluster selection.

•  Greater clarity on planned investment for CO2 transport and storage, including a streamlined route to market for future CO2 storage sites and a plan for making economic licenses more readily available to those that have safety licenses for CCUS acreage already.

•  The plan for ensuring our supply chains and skills can meet demand

416.  The roadmap should also explore how the UK can utilise its natural CO2 storage facilities for export. This will require further work on regulations and standards for international carbon pricing and markets (as detailed in Pillar 6).