With the turn of the year comes a time for reflection. For CCUS, 2018 might well be remembered as a real pivot point in the journey towards creating a truly commercial industry in the UK. Many of those who have been involved in this journey over the last decade (like some of us at Pale Blue Dot Energy) are growing cautiously optimistic that after several false starts, CCUS might be getting back on track in the UK, with the political support required to help CCUS meet the country’s legally binding climate change targets.
Throughout this past year and following on from the launch of the Clean Growth Strategy in 2017, the UK Government has put CCUS back on the energy and environment agenda, taking a new and quite different approach from what has been tried in the past.
This time around, Government and Industry are working much more closely together to move CCUS forward. This is something that has been reiterated by UK Energy and Clean Growth Minister Claire Perry throughout the year and was again highlighted at the international Accelerating CCUS conference in November.
It is fair to say that 2018 has seen some serious recommitment to CCUS from both Industry and Government with ongoing collaboration and joint working through the newly established CCUS Council and the intense six-month Cost Challenge Task Force (CCTF). One of the key CCTF recommendations was to bring down the cost of CCUS through deployment and learning by doing.
With Clean Growth as one of the four ‘Grand Challenges’ of the Industrial Strategy, there also seems to be a deliberate shift in focus from CCUS on power, to dealing with industrial emissions and clustering of carbon intensive industries that have shared geographical infrastructure. This was recently backed up by an early Christmas present to the CCUS industry in the form of a new £170m funding package to develop net-zero carbon industrial hubs.
Here, CCUS can now play a role as one of a range of technologies that will all be required to move industrial regions towards net-zero carbon. This includes the introduction of hydrogen generation with CCS to help unlock some of the particularly hard to decarbonise sectors. CCUS has been reframed in a more positive way as a technology to ensure protection and growth of the UK’s industrial regions, rather than an expensive bolt-on to help reduce CO2 emissions from fossil power generation.
Progressing real projects
A new wave of UK projects is emerging, showing that industry is ready and willing to move forward. Some of these developments look very different from their predecessors; focusing on reducing industrial emissions and hydrogen generation, areas that were not within the scope of previous UK competitions.
One of these is the Acorn CCS Project. As the developer of Acorn, a recognised European Project of Common Interest, the team at Pale Blue Dot Energy has been working in the UK CCS space for well over a decade. Acorn has been designed specifically to learn from the past and be robust for the future – a low-cost option that makes best use of legacy oil and gas infrastructure in order to unlock the very large scale CO2 storage potential of the UK Central North Sea for the North East coast of the UK and beyond.
2018 saw Acorn become the first ever CCS project to receive funding under the European Commission’s Connecting Europe Facility. This funding has been matched by both the UK and Scottish Government, along with Pale Blue Dot Energy and Total and represents a significant milestone for CCS in Europe. The year was topped off with the award of the first ever Lease Option for carbon dioxide storage from Crown Estate Scotland, the first ever carbon dioxide appraisal and storage licence by the Oil and Gas Authority (OGA) and representing UK CCUS at the United Nations 24th Conference of Parties in Poland; it’s safe to say it has been a busy year. Early next year will see the Accelerating CCS Technologies (ACT) Acorn feasibility work coming to an end, with the project aiming to be ready to start front end engineering design (FEED) in Q2 2019.
Policy clarity in 2019
However, for deployment of any CCUS projects in the UK, clear and supportive Government policy must emerge this year. This was a consistent theme throughout 2018, with the Committee on Climate Change (CCC) Progress Report to the UK Government in June sending a strong message that the chopping and changing of strategy around CCUS had to end.
At the Accelerating CCUS conference in Edinburgh, several expert panellists reiterated the same call. Allan Baker from Societe General gave the view from the financial sector: a lack of clear government policy is a real issue for financiers. Going forward the financial community will be needed to play a key role in developing a commercial CCUS industry and so this is really a priority for the UK. Professor Jim Skea, co-chair of Working Group III of the Intergovernmental Panel on Climate Change (IPCC) that led the 1.5C special report, reinforced that to get to the UK’s Paris Agreement targets we really need the policy framework for CCS now.
Knowing that a clear policy framework is key to offering confidence to industry, the UK Government launched its CCUS deployment pathway action plan (CCUS Action Plan) which formalised what the Government will be doing next year and beyond to ensure they have the option to deploy CCUS at scale in the 2030s. 2019 looks set to be a very busy year as the Government commences detailed engagement with industry and pulls together the outcomes of several studies that will shape thinking on these policies.
If the Government sticks to these 2019 ‘New Year’s resolutions’, by this time next year we should have a great deal more clarity around how CCUS will move forward in the UK.
A happy new year for CCUS?
The signs are good, but amidst all the inevitable political upheaval in the months ahead, we do need to see a real and serious commitment from the UK Government to keeping its 2019 ‘New Year’s resolutions’ and timescales as laid out in the CCUS Action Plan.
From industry, we need to widen out the engagement around CCUS developments and the opportunities it can bring to industrial clusters across the UK, positioning key industrial regions to really take advantage of the decarbonisation opportunities that CCUS infrastructure investment can bring.
By this time next year, we hope to be boasting about that clear policy framework that we have managed to create in the UK – one that will mobilise industry and private finance to kickstart a world-leading UK CCUS sector right here, getting us on track to meeting our climate change targets.
So here’s to 2019 building on the momentum of 2018 and working together with Industry and Government to create a very happy new year for CCUS.