Out-Law News 2 min. read

Latest phase of UK government’s carbon capture drive ‘great to see’

A legal expert has welcomed the UK government’s announcement of which carbon capture, use and storage (CCUS) projects it will evaluate for the second phase of its cluster sequencing process.

Stacey Collins of Pinsent Masons said: “It’s great to see that a significant number of projects have met the eligibility criteria, and that there are number of different types of projects and industries represented. There is a great opportunity here to prove carbon capture can be utilised to help decarbonise a variety of processes and businesses.”

The Department for Business, Energy and Industrial Strategy (BEIS) launched the process to identify CCUS clusters suitable for deployment by the mid-2020s in May last year, as part of its 10-point plan for a ‘green industrial revolution’. The technology is intended to extract CO2 from industrial processes before it is emitted into the atmosphere with the intention of storing it underground for thousands of years.

BEIS previously announced that CCUS projects in the East Coast cluster and HyNet were given ‘track-1’ priority, while the Scottish cluster was given a reserve status in case a backup becomes needed. The department has since received applications from ‘power CCUS’, ‘industrial CCUS’ and ‘hydrogen CCUS’ projects to connect onto a track-1 or reserve cluster as part of the second phase of the cluster sequencing process.

Last week BEIS said that VPI Humber Zero, Whitetail Clean Energy, Net Zero Teesside Power, Alfanar CCGT Teesside, Keadby 3 Carbon Capture Power Station and C.GEN Killingholme in the East Coast cluster had all met the phase two ‘power CCUS’ eligibility criteria. HyNet’s Making Net Zero Possible – Grain and Peterhead Carbon Capture Power Station in the Scottish Cluster also met the criteria and will proceed to the evaluation stage.

‘Power CCUS’ projects aim to create low carbon electricity by burning natural gas and capturing at least 90% of the CO2 that would otherwise be emitted. BEIS is seeking “commercial scale power CCUS plants” that can generate and export at least 100MW of low-carbon electricity to the grid by 2027 at the latest.

Meanwhile, BEIS announced that a number of East Coast cluster projects met the ‘industrial CCUS’ eligibility criteria, including STV 1+2 Energy from Waste Carbon Capture Project, STV 3 Energy from Waste Carbon Capture Project, Tees Valley Energy Recovery Facility Project (TVERF), Altalto, Immingham waste to jet fuel, Lighthouse Green Fuels, Redcar Energy Centre, Humber Zero - Phillips 66 Humber Refinery and Prax Lindsey Oil Refinery Carbon Capture Project.

ZerCaL250, Teesside Hydrogen CO2 Capture, Saint-Gobain Glass Carbon Capture Project, Norsea Carbon Capture, CF Fertilisers Billingham Ammonia CCS, Teesside Green Energy Park Limited and North Lincolnshire Green Energy Park were also East Coast cluster projects that met the criteria, along with Viridor Runcorn Industrial CCS, Protos Biofuels, Protos Energy Recovery Facility, Hanson Padeswood Cement Works carbon capture and storage project, CF Fertilisers Ince Capture Plant, Buxton Lime Net Zero, Carbon Dioxide Capture Unit - EssarOil UK and Emerge CCS from HyNet.

The successful Scottish cluster projects were the CO2 Extraction from St Fergus Gas at SAGE Terminal and Acorn Capture. ‘Industrial CCUS’ projects will be expected to be able to capture at least 85% of carbon emissions from their industrial processes. In return, BEIS will provide capital co-funding and/or contractual-based revenue support to successful applicants. Projects aimed at retrofitting CCUS in existing ‘grey’ hydrogen facilities fall within the industrial CCUS category.

Newly built CCUS-enabled hydrogen production plants are considered in a separate ‘hydrogen CCUS’ category. Such projects need to be able to show that they have identified a buyer for the low-carbon hydrogen they produce as part of the steps needed to meet the eligibility criteria and will benefit from a new a ‘variable premium’ price support mechanism to help them become commercially viable.

H2NorthEast, Uniper Humber Hub Blue Project, bpH2Teesside and Hydrogen to Humber (H2H) Saltend projects in the East Coast cluster successfully met the ‘hydrogen CCUS’ criteria, along with Project Cavendish and HyNet Hydrogen Production Project (HPP) in Hynet, and Acorn Hydrogen and the Fife Hydrogen Hub in the Scottish cluster.

Collins said: “We’ll have to wait to see the results of the next evaluation phase. It’s not clear when the short-listed projects will be announced as the stated timetable is ‘from May 2022’. Nevertheless, it’s encouraging to see the process moving forwards.”

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