Government Announces Shortlist of CCUS Phase 2 Projects

12th August 2022 – The Carbon Capture and Storage Association (CCSA), the trade body for the Carbon Capture, Utilisation and Storage (CCUS) industry in the UK, has welcomed the announcement of shortlisted bidders in Phase 2 of the CCUS Cluster Sequencing Process. A crucial step in the delivery of the Government’s Net Zero Strategy. 

The Phase 2 competition is for carbon capture projects that wish to connect to the carbon dioxide transport and storage infrastructure that will be developed through the initial “Track 1” clusters (HyNet North West, East Coast Cluster and Scottish Cluster in reserve).  

Following the submission deadline in January 2022, 41 CCUS and Hydrogen projects from across the UK were considered eligible by BEIS. Of the 41 eligible projects, 20 projects have today been shortlisted for possible support from Government, once it has established that the projects represent a ‘value for money’ investment for the taxpayer. The Government support will be in the form of revenue contracts to cover the cost of operating with carbon capture and storage, as well as potential access to capital support from either the £1bn CCS Infrastructure Fund (CIF) or the Net Zero Hydrogen Fund. The next step for the shortlisted projects is expected to be bilateral negotiations with BEIS to finalise the contracts. 

Ruth Herbert, Chief Executive at the CCSA, said:  

“I am delighted to see the government providing certainty to business today by confirming the Phase 2 shortlist. These world-leading projects can now move forward and prepare for the next stage of the process, which we hope will advance swiftly. 

This announcement also sends a very strong signal that Carbon Capture, Utilisation and Storage (CCUS) and Net Zero remains a priority for the UK Government, particularly since it comes during a change in leadership.  CCUS is critical in achieving Net Zero and positioning the UK as the world’s first at-scale hydrogen economy.  It will transform our industrial regions – driving jobs and growth through inward investment and export opportunities.  

That 41 eligible projects applied to Phase 2 demonstrates the scale of interest in CCUS in the UK.  We look forward to getting further clarity on the timetable for future phases and the selection of further clusters in the Autumn, as well as progress on the Energy Bill – all crucial if we are to meet the government’s ambition of four operational clusters by 2030, remain on track to achieve Net Zero by 2050 and secure our place as a global leader in CCUS technology.”