UK government consults on carbon capture usage and storage projects

Out-Law News | 15 Feb 2021 | 3:43 pm | 2 min. read

The UK’s Department for Business, Energy and Industrial Strategy (BEIS) has opened a consultation on carbon capture usage and storage (CCUS) in order to determine the sequencing of project clusters.

The UK’s Department for Business, Energy and Industrial Strategy (BEIS) has opened a consultation on carbon capture usage and storage (CCUS) in order to determine the sequencing of project clusters.

The government has outlined a two-phase process in order to allocate CCUS programme support, and a proposed timeline for the process. The consultation also covers the details of the suggested phase one cluster sequencing process, including potential evaluation criteria and the way in which these may be applied, and the direction of travel for phase two of the process, including a potential approach for allocating support to specific projects within clusters.

Energy law expert Stacey Collins of Pinsent Masons, the law firm behind Out-Law, said the consultation backed up the government’s Ten Point Plan for a Green Industrial Revolution and the energy white paper released at the end of 2020, where it committed to the deployment of the CCUS clusters.

“It’s encouraging to see momentum being maintained in relation to CCUS for power, industry and hydrogen, and that the government is keeping to the timetable it set out for progressing the CCUS business models last December,” Collins said.

“There are now a number of established carbon capture clusters in the UK, which are developing their projects at pace in preparation for moving to deployment at an early stage. It remains to be seen whether the two-track and phased process laid out by the government will be the actual deployment pathway chosen after the consultation, but it’s an exciting time to be active in the UK’s CCUS market in any event,” Collins said.

BEIS said in phase one, two CCUS clusters would be provisionally named on to track one of the rollout process, with support in order to deploy in the mid-2020s. The proposed timetable would see phase one of the programme begin in April 2021 and conclude in October 2021.

Phase one would begin with an eligibility stage, screening cluster plans for eligibility against three criteria. Only eligible clusters would progress to the evaluation stage, where plans would be assessed against five weighted criteria and the two highest performing clusters sequenced onto track one.

According to the consultation document (47 page / 514KB PDF), no funding would be allocated at the end of phase one and any decisions would be provisional and fully reversible. Projects located in the top two clusters would have the first opportunity to negotiate with government.

In phase two, the government would determine the individual projects within the cluster locations identified in phase one that would receive support. Phase two is tentatively scheduled to begin in August 2021.

The phase two process is set to be different for each CCUS application – transport and storage, power, industry and hydrogen. Any CCUS projects that could feasibly connect to the cluster location would be eligible for phase two, not just those included on the phase one plan submitted by the cluster lead.

The government said it expected to deploy a further two clusters on track two of the programme by 2030. It said that this did not represent the extent of its ambition, as all clusters would need to decarbonise to reach net zero carbon emissions by 2050.

Collins said the consultation would be of interest to mainly investors and developers involved in potential CCUS projects, industrial and energy sectors, and non-governmental and other organisations with an interest in climate and energy. The consultation closes on 10 March.