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New Carbon Capture Supply Chain Strategy calls for coordinated action from UK Government and industry to create a new homegrown industry and support tens of thousands of jobs

The Carbon Capture and Storage Association (CCSA), the trade body for the Carbon Capture, Utilisation and Storage (CCUS) industry in Europe, is today launching a CCUS Supply Chain Strategy which sets out a number of actions to deliver a successful CCUS industry that has the potential to safeguard 77,000 existing jobs in heavy industries such as steel and cement, while creating 70,000 new jobs in the green economy.

The CCSA has launched the strategy jointly with the CCUS Council Supply Chain Working Group, chaired by Make UK Chairman Lord Hutton. The working group advises ministers on deploying and scaling up carbon capture technology.

In order to achieve a target of 50% UK content in the manufacturing, goods and services underpinning new carbon capture and storage technology the Supply Chain Strategy sets out three key actions for Government and industry during the early phase of subsidised deployment:

A clear timetable for when and where government support will be allocated to capture projects to drive confidence and raise the profile of the sector,
Flexibility in bilateral negotiations on cost and delivery dates where there is an opportunity to secure higher UK content; and

Targeted financial support for building capacity and transitioning existing supply chain businesses to serve the CCUS programme

Today’s strategy includes a Good Practice Guidance document for industry which, provided the above actions are met, sets out a pathway for delivering the UK content ambition. This guidance is aimed at supporting developers and contractors to build local supply chains by improving planning and engagement at an early stage and throughout the procurement process.

The guidance document covers six key areas of focus:

Target an increasing volume of local manufacturers and businesses to build and operate CCUS clusters.
Promote the introduction of homegrown technology.
Enhance the quantity and quality of local jobs created or protected.
Drive investment in skills and training to support CCUS.
Encourage transparency in the supply chain process.
Create wider economic benefits to the UK from investing in CCUS.

The CCSA is also today submitting a paper on CCUS skills into the Green Jobs Delivery Group, which was convened by the Government to support the creation of almost half a million green jobs by 2030. The “CCSA Workforce & Skills Position Paper” sets out the strong linkages between developing the CCUS supply chain and skills and highlights the need for urgent action to coordinate the skills requirements across the entire low carbon economy.

Ruth Herbert, Chief Executive at the CCSA, said:

“The report published today at our President’s Reception emphasises the massive opportunity that CCUS represents for the UK. Our strategy concludes that developing a UK CCUS supply chain, together with skills and training programmes, is urgently needed to decarbonise our heavy industries and protect jobs in regions such as Yorkshire & Humber, Wales, the North-West of England and the North-East of Scotland.

“The prize is significant – the opportunity for the UK to access a multi-billion-pound global supply chain market for CCUS equipment, goods and services, as well as the creation of over 70,000 new UK jobs whilst safeguarding up to 77,000 jobs in carbon-intensive industries at risk of being relocated abroad.

“This strategy requires Government to target investment on manufacturing yards which have the potential to supply high value items to the CCUS industry and will be delivering multiple large strategic infrastructure developments over the next decade. From the industry’s side, by following the guidance we aim to improve the transparency of the procurement process and ensure that local supply chain engagement is prioritised from early on in the development cycle.”

Lord Callanan, Parliamentary Under Secretary of State (Minister for Energy Efficiency and Green Finance), said:

“A successful UK supply chain is key to sustaining existing, and creating new, high-skill, high-value green jobs and supporting growth in industrial clusters.

“To achieve this, industry and government must work together and today’s new report from the Carbon Capture and Storage Association is a crucial step forward to harnessing the full potential of Britain’s CCUS industry.”

Lord Hutton, Chair of Make UK and Chair of the CCUS Council Supply Chain Working Group, said:

“It’s encouraging to see the CCUS industry take the lead in developing supply chain guidance and if projects follow this guidance, together with Government providing strong support, then a reliable, high quality and secure domestic supply chain can be achieved.”

 

ENDS

Notes to Editors

On the 12th July, the CCSA published two documents which can be found below.

The Supply Chain Strategy and Good Practice Guidance Document is a joint study between the CCSA Supply Chain Working Group and the CCUS Council Supply Chain Working Group. The following organisations contributed to this study:

Aker Solutions
Baker Hughes
BP
EIC
NSTA
OEUK
Phillips 66
Progressive Energy
SSE
Worley

CCUS, or Carbon Capture, Utilisation and Storage, is a key low carbon solution – vital to meeting the UK’s statutory Net Zero target at least cost. CCUS enables the production of clean power, clean products (such as steel and cement) and clean hydrogen – which can then be used to decarbonise heating and transport. In addition, CCUS also enables greenhouse gas removal from the atmosphere through Direct Air Capture with Storage (DACS) or Bioenergy with CCS (BECCS).

The CCSA is the lead European association accelerating the commercial deployment of CCUS. We work with members, governments and other organisations to ensure CCUS is developed and deployed at the pace and scale necessary to meet net zero goals and deliver sustainable growth across regions and nations.

The CCSA currently has over 100 member companies who are active in developing and deploying different applications of carbon capture, CO2 transportation, utilisation, geological storage, and other permanent storage solutions, including end-users from the power and industrial and hydrogen production sectors and members from management, legal and financial consulting sectors.

For media enquiries please contact Judith Shapiro on +44 (0)20 4583 2295 or email ju************@************on.org

To find out more about the Carbon Capture Storage Association (CCSA) please visit the CCSA website at http://www.ccsassociation.org/.

CCSA CCUS Supply Chain Good Practice Guidance

CCSA Supply Chain Good Practice Guidance – Summary

UK CCS Supply Chain Value Study

The CCSA has today published a new “Workforce & Skills Position Paper”.

This position paper has been produced by the CCSA Skills & Training Task Subgroup, operating under the CCSA Supply Chain Working Group. Its purpose is to present the CCSA’s stance on and understanding of the skills and workforce challenges that are currently facing the Carbon Capture, Utilisation and Storage (CCUS) sector. It offers a high-level overview of the existing skills and training landscape for the CCUS and low carbon hydrogen workforce, encompassing jobs across the entire value chain from capture to transport & storage during the construction and operational phases. This includes an examination of the skills and training obstacles faced by the current workforce, as well as those who are currently in the education system and will constitute the future workforce.

The UK CCUS and Carbon Capture and Storage (CCS) enabled low-carbon hydrogen sector is encountering a scarcity of skilled personnel, particularly in design and engineering construction. This shortage has the potential to significantly impede the timely completion of CCUS projects and have adverse effects on the UK’s Net Zero objectives. The competition for skilled labour not only exists within the CCUS sector but also extends to other large-scale infrastructure projects who require the same skilled workforce to deploy across the UK within similar timeframes. The need to replace or re-train an ageing and non-diverse workforce, along with the challenge of attracting a significant number of school and college graduates to an industry that may not be perceived as glamorous, further intensifies the urgency of attracting and training new workers. The position paper outlines a series of crucial recommendations that are key to ensuring the availability of resources to facilitate the transition to Net Zero through the implementation of CCUS.

CCSA Workforce & Skills Position Paper

CCSA Workforce & Skills Position Paper – SUMMARY

The Carbon Capture and Storage Association (CCSA), the trade body for the Carbon Capture, Utilisation and Storage (CCUS) industry, welcomes the Climate Change Committee’s 2023 report to Parliament on progress in reducing emissions, published today.

Ruth Herbert, Chief Executive at the CCSA, said:

“This report makes clear that the UK must get moving and accelerate deployment of CCUS to have any chance of reaching our net zero targets. The CCC spell out that there is currently no clear policy for UK industries to decarbonise. CCUS offers an opportunity to decarbonise heavy industry, while protecting and creating jobs.

“We urgently need a CCUS deployment plan for the whole of the UK.  We’re still waiting for contracts to be signed for the first eight carbon capture projects, and for ministers to confirm the next steps on expanding the clusters on the east coast and north west of England, as well as a timeline for selecting further clusters in other parts of the UK, which is necessary to meet the Government’s ambition of four CCUS clusters by 2030.”

 

For media enquiries please contact Judith Shapiro at ju************@************on.org/ Tel: +44 (0)20 4583 2295

At the CCSA we’ve been taking some time to reflect on the momentous announcements over the past few weeks. I’m delighted to finally see the decades of hard work and collaboration between industry and government come to fruition. This is a pivotal moment which fires the starting gun on the UK CCUS industry. 

The Government’s Spring Budget announced £20billion of funding had been allocated for CCUS projects, an unprecedented recognition of the importance of CCUS in delivering net zero and boosting the UK’s economic growth. The funding means the initial Track 1 CCUS clusters can truly start moving forward with the first eight projects – a critical springboard for the UK industry to further develop and a kickstart for the decarbonisation of North-West and East Coast of England. The funding will provide operational payments to cover the use of carbon capture on power, industry and hydrogen production and this will unlock private sector capital for its construction.  These eight projects will collectively capture and store around seven million tonnes of CO2 a year and create thousands of jobs.  

These projects are just a small proportion of what is required to reach Net Zero. But they represent just one tenth of the current project pipeline, demonstrating the scale of the opportunities in front of us.  Last year the CCSA identified over 70 million tonnes of carbon emissions from around the UK which could be abated with Carbon Capture and Storage by 2035. Delivery of all of these projects would keep the UK on track with its Net Zero Strategy trajectory and provide significant economic benefits to disadvantaged regions.  

Critically, this is not just a Net Zero opportunity. The CCUS pipeline can provide 70,000 new jobs, as well as protecting 77,000 existing jobs, across the UK’s industrial heartlands, all while positioning our country to export low carbon products and CCUS skills and services around the globe. There is more to do and the necessary next steps are set out in Chris Skidmore MP’s Net Zero Review recommendations.  

We urgently need to see a clear CCUS deployment plan for the whole of the UK. To have a fighting chance of reaching Net Zero and leading the low carbon industries of the future, it is vital all of the industrial clusters across the UK get up and running with carbon capture and storage as soon as possible. 

Delivery of this plan offers an exciting, near-term opportunity to put our industrial regions at the forefront of the next industrial revolution – leading the way in the transition to a global low carbon economy in the same way as British industry led the world in the first industrial revolution. So great is this opportunity – the kind that only comes every few hundred years – other countries are racing to take up the mantel. Both the US Inflation Reduction Act and the EU’s Green Industrial Plan and Net Zero Industry Act set out powerful CCUS measures.  We risk falling behind despite the UK’s 18-year head start (the CCSA was established in 2006).   

We need a longer-term commitment to remain an attractive proposition to investors and to develop our own supply chain. Ahead of the Spring Budget, the CCSA made a Budget Submission requesting funding to cover the period to 2035. We believe this would provide sufficient forward visibility to develop a UK-based supply chain capable of both servicing the UK project pipeline and exporting technology and services to other emerging CCUS markets. We will keep up the pressure on the Government to deliver this. 

The recently announced Track 1 expansion will provide an important opportunity for the remaining shortlisted projects, as well as new projects. The expansion will launch later this year and government is expected to engage with the sector on delivery shortly. We urgently need to see more detail before the summer regarding the timeline for the expansion, the eligibility criteria, and what the industry can expect going forward. 

The Track 2 process for the next two CCUS clusters was also launched at the end of March. It’s important this process moves forward quickly if the UK is to meet its 2030 target of storing up to 30 million tonnes of CO2 a year. However, we are still awaiting further details on the timeline and criteria for selecting capture projects under Track 2.  

The Chancellor has said he will be setting out the UK’s response to the US Inflation Reduction Act and the EU Net Zero Industry Act this Autumn. While I am relieved to hear the UK will not sit back and shrug its shoulders as good people and projects leave the UK, the question on everyone’s lips is “can he afford to wait that long?”. Boards are already impatient to see the case for continued and new investment here in the UK. It is time for the government to set out its stall – persuasively – and action a swift response: every week counts in the race to build this industry. 

There is a powerful case to make. The UK is blessed with significant CO2 storage capacity in the North Sea and the East Irish Sea, and a strong offshore skills base, both of which make us uniquely placed to become one of the global leaders on CCUS deployment.  Critically for long term planning, there is widespread political consensus around CCUS’ vital role in reducing industrial emissions and enabling a Net Zero power system, as evidenced by the recent second reading of the Energy Bill in the House of Commons. The Bill provides an investable regulatory framework for CO2 transport and storage and world-leading carbon capture business models that minimise subsidy and provide long-term contractual certainty to investors.   

All that is needed to create a haven for CCUS development is an injection of confidence to take the big decisions, to accept some inevitable risks and to set aside any philosophical discomfort with the “build it and they will come” approach which is being pursued elsewhere.  The UK has developed a strong framework for a new industry – it just needs to turn on the funding tap and watch the inward investment flood in.   

The counterfactual of continuing to constrain the roll-out of CCUS through extended allocation processes will slam the brakes on the UK economy as private investment across a range of key ‘economic lifeblood’ sectors, such as manufacturing, energy and transport is either put on hold or finds another home.  Where civil servants and regulators need more resources to move at pace they should be given them, and quickly.  There is no option for the UK economy to stand still in this global race for the ‘once in a century opportunity’ – we have to speed up or we will be left behind. 

The UK’s CCUS policy has made tremendous progress in the past few months. I’m thrilled the industry is finally able to advance towards delivering the first eight projects on the ground. It really does feel like the official beginning of CCUS implementation in the UK.   

Just think what could be achieved with a bit more ‘bounce’ in the springboard. 

 

Current CCUS cluster proposals in the UK

18 May 2023, London

In response to today announcement by the North Sea Transition Authority (NSTA) to offer 20 carbon storage licences for award, Ruth Herbert, Chief Executive at the CCSA commented:

“Availability of permanent CO2 storage is a key requirement for achieving the UK’s net zero strategy. The CCSA’s Delivery Plan recommended that the government and industry rapidly bring additional storage capacity to a commercial stage of readiness.

“This first carbon storage licensing round from the NSTA is a vital step towards unlocking the UK’s full CO2 storage potential. Given the climate emergency, we hope this will be the first of many such rounds and that further sites around the UK will have the opportunity to apply in the near future.”

ENDS

For media enquiries please contact Judith Shapiro/ ju************@************on.org/ Tel: 020 4583 2295