The UK government on Oct. 19 designated two carbon capture and storage projects in the northwest and northeast of England for funding support, but prompted disappointment from the venture leading Scotland's Acorn CCS project, left in reserve.
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The projects granted "Track-1" status for potential startup by the mid-2020s are the BP-led East Coast Cluster, which will store emissions from the Humber and Teesside regions under the North Sea, and the Hynet project led by Italy's Eni, which will store emissions in depleted gas fields in the Liverpool Bay area, energy minister Greg Hands told parliament.
The decision, announced as the UK showcases its 'net-zero' efforts ahead of COP26 climate talks, makes available a portion of GBP1 billion ($1.4 billion) in government funding allocated to support storage of CO2 emissions from industrial sites.
Five applications were made, with the Scottish Acorn project, led by Shell and London-listed Harbour Energy, granted "reserve" status in case one of the Track-1 projects were to fall through, Hands said.
In a statement, the East Coast Cluster partners reiterated their target of storing up to 27 million mt of CO2/year by 2030, equivalent to 50% of UK "industrial cluster" CO2 emissions.
Under the scheme, BP is leading the Northern Endurance Partnership -- alongside Shell, TotalEnergies, Eni, Norway's Equinor and the National Grid -- which will be responsible for transport and storage of CO2 from two industrial zones known as Zero Carbon Humber and Net Zero Teesside.
The East Coast Cluster partners described the decision as a "major step" toward the "world-leading ambition to establish the first 'net zero' carbon industrial cluster in the UK by 2040," adding it would "create and support an average of 25,000 jobs/year between 2023 and 2050," with around 41,000 jobs at peak in 2026.
However, Nick Cooper, CEO of Storegga, the company working alongside Shell and Harbour to implement Acorn, said he was "disappointed" at the failure to approve the Scottish project, which could potentially decarbonize Scotland's sole refinery, Grangemouth, and the ExxonMobil-run Fife Ethylene Plant, among other sites. "We have been very clear that all of the current clusters need to be operating to meet UK net-zero targets and will be seeking support to progress as soon as possible," Cooper said.
The other projects not given backing were the V Net Zero Humber Cluster, which aims to decarbonize the Humber and Lindsey refineries and inter-connected Immingham power plant -- led also by Harbour -- and Delphynus, a project led by London-based Neptune Energy to take CO2 from the south Humber region.
The V Net Zero partners told Platts: "While we are clearly disappointed not to have been awarded Track-1 status, we remain committed to progressing the V Net Zero Humber Cluster, to decarbonizing the Immingham [area] and to capture 50% of the existing Humber industrial emissions through CCS."
Neptune meanwhile said: "We remain committed to progressing with our Delphynus CCS plan, which is an effective, value-for-money solution. We believe all of the proposed clusters will be necessary to support the UK in meeting its net-zero targets."
Several of the projects also envisage hydrogen fuel production. BP said in March it was considering developing the UK's largest 'blue' hydrogen production plant on Teesside, with gas as a feedstock.
BP is the only global oil and gas major to specifically quantify its expectations of decline in its oil and gas production, saying it sees its upstream hydrocarbon output falling 40% by 2030.
Countries around the North Sea are trying to advance CCS as a means to achieving net-zero emissions, with Norway working on the Longship project involving Equinor, Shell and TotalEnergies.
Critics say the UK has yet to resolve some regulatory issues related to CCS, notably over liability for secure storage in the event of storage sites changing hands.