UK told it needs to capture £100 billion opportunity now

The UK has been told it can take advantage of the potential £100 billion boost in creating a viable carbon capture and storage, sector but they have to move fast.

A report commissioned by the Department for Business, Energy and Industrial Strategy (BEIS) and produced by industry body OEUK through the North Sea Transition Deal, said immediate action is needed to make sure government’s net zero drive benefits UK jobs and economy.

It found supply chain companies in the UK offshore oil and gas sector are in prime position to win work in carbon capture and storage (CCS) if urgent action is taken by governments and industry.

The report said offshore oil and gas supply chain companies already have some capabilities in areas including plant design and engineering, plant fabrication, and construction, but more needed to be done.

“CCS has been recognised as a critical technology to help energy intensive sectors, like cement and power generation, meet their net zero goals,” it stated. “The Government’s Net Zero Strategy says the UK will need to capture 50 million tonnes a year by 2035.”

Katy Heidenreich, supply chain & operations director, Offshore Energies UK explained: “As one of the first industrial sectors to come out in support of the UK government’s 2050 net zero target, we consider CCS a matter of national interest to our economy and our environment.

“However, as the report shows, without urgent and focused action, the UK will miss out on vital CCS investment; the opportunities for jobs and communities in industrial heartlands; and any hope of establishing a leadership position for the UK in this exciting new sector.”

“But with CCS, UK can maintain reliable supplies of energy, cut emissions, generate jobs and create huge export opportunities,” she added. “This report is therefore timely in setting out the dozen or so actions that governments and industry can take to ensure our supply chain benefits from these opportunities.”

Heidenreich  continued: “Offshore Scotland, east England and Merseyside lie rock formations with the potential to hold up to 78 billion tonnes of Carbon Dioxide  (CO2). That is the equivalent of two centuries’ worth of the UK’s emissions today. The prize is therefore huge.”

She added: “The UK has three of the four components necessary to make CCS a great success – including a potentially significant market for exports of technology and expertise.

“We have large industrial clusters emitting CO2; extensive gas transport infrastructure that may be repurposed; and a good scientific understanding of the geological requirements for long-term CO2 storage.

“However, the fourth component, our supply chain, is fragile. Its margins are low and over the years, heavy manufacturing has lost out to competition from overseas. The UK is at risk of losing this world-class supply chain as investors follow more attractive opportunities elsewhere.

“We need to act fast on this and we know that if 100 CCS storage sites are needed to reach net zero by 2050, the planning process must start in short order.

“To do this, supply companies need confidence.” the way we do business has to change, with CCS licensees engaging early with their supply chain. Open communication and collaboration will allow companies to see what’s over the horizon and plan accordingly. Government needs to approve projects rapidly so that clear strategic commitment can be given to provide companies with the confidence to build the transport and storage needed to make CCS a success in the UK.”