By 2024, government must develop a strategy for the plan for non-pipeline transport and how dispersed sites and mini clusters can connect to the CCS network and what support should be offered for doing so. |
417. Half of industrial activity takes place at dispersed sites. Like the rest of industry, these sites will need access to the full range of technological solutions to decarbonise fully, including fuel switching and CCUS. However, because of their distance from the clusters where hydrogen and CCUS infrastructure will first be deployed in the UK, dispersed sites face barriers to accessing these technologies, including uncertainty about access in the future, which is stifling their ability to plan for deep decarbonisation.
418. As a result, many are at an early stage in their decarbonisation journey and require support to plan and upskill to overcome knowledge barriers.
419. Current approaches to decarbonising such places are sector-led, which is not always optimal. Different areas face different barriers and opportunities - we cannot for example electrify or fuel switch all dispersed sites or the entirety of a single industry. Instead, it is beneficial to take a place-based approach to supporting dispersed sites that reflects the needs and capacity of the industry and the local area.
420. Exemplifying the challenge are five cement production sites in the Peak District, which output around 2MT of greenhouse gas emissions annually. There is a huge decarbonisation opportunity, but given they sit outside of the HyNet cluster, it is unclear how this will be realised.
421. At an evidence roundtable for the Review, we heard that it was, and will continue to be, very challenging for dispersed sites to connect into the CCUS network, exacerbated by a lack of non-pipeline transport options such as shipping of CO2.
422. This Review therefore recommends that, by 2024, government must develop a strategy for how dispersed sites and mini clusters can connect to the CCS network and what support should be offered for doing so.
423. Encouraging mini-cluster development is a low-regrets option. Co-located dispersed sites can share costs, risks and expertise, overcoming information barriers and benefit from economies of scale. Non-pipeline transport such as shipping should be included, to facilitate links between dispersed sites and more advanced clusters.
424. Government should also ensure that the Local Net Zero Hubs continue to have capacity to support local solutions at dispersed sites, so that every industrial energy intensive location can reap the benefits of CCUS.
Mission: Setting a clear plan for industry decarbonisation built around long-term investment in CCUS and hydrogen networks and technologies. Energy intensive industries such as steel and cement will need to use emerging technologies like CCUS and hydrogen in order to decarbonise (See Pillar 3). CCUS will also play a role in balancing remaining emissions from the use of oil and gas as transition fuels. | |
Issue heard by the Review | Action recommended |
Lack of clarity on the plan for cluster selection beyond Track 1; industry needs greater certainty on the process and timeline for cluster selection to incentivise investment and kick start deployment. | In 2023, government must act quickly to re-envisage and implement a clear CCUS roadmap, showing the plan beyond 2030. 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. The roadmap should include: a. 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 b. 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. c. The plan for ensuring our supply chains and skills can meet demand. |
Lack of long-term funding certainty for CCUS and hydrogen projects, exacerbated by the recent temporary pause of the Energy Bill, which will be essential for the delivery of business models. | As soon as legislation allows, government must finalise and legislate for hydrogen and CCUS business models and regulatory frameworks across the value chain. This will enable the UK to start awarding contracts and building capacity as soon as possible. In 2023 HMT should set out the funding envelope available to support Track-1 clusters. |
Dispersed sites face specific barriers to decarbonisation, and risk being left behind due to their lack of access to established industrial clusters which are being prioritised for early deployment of CCUS and hydrogen. | By 2024, government must develop a strategy for dispersed sites and mini clusters to connect to the CCS network and set out what support should be offered for doing so. This should include non-pipeline transport. For hydrogen, we recommend that government delivers the transport and storage business models as soon as feasibly possible. |
In the short-term, we will still need oil and gas as transition fuels towards 2050. Where their use cannot be eliminated, CCUS and other greenhouse gas removal methods will be needed. | Government should consider setting a 10% storage obligation target to fossil fuel producers operating domestically, to restore carbon dioxide to the geosphere by at least 2035, separate to any investment on nature-based solutions. Government should also recognise the importance of 'geological net zero' and work to align international ambitions toward geo zero by 2050, in line with net zero. |