UK Budget: Who Gets the Government’s Green Investments?
Autumn brings falling leaves, pumpkins and the UK’s new budget.
The 2024 Autumn Budget was announced by MP Rachel Reeves, the first woman to serve as Chancellor of the Exchequer, on the 30th of October.
It contains a national insurance rise, changes to capital gains tax and lots of sustainability investments.
Rachel says: “To maximise the growth benefits of our clean energy mission, we have confirmed key investments, such as carbon capture and storage, to create jobs in our industrial heartlands.
“Today, I am providing funding for 11 new green hydrogen projects across England, Scotland and Wales—they will be among the first commercial-scale projects anywhere in the world—including in Bridgend, East Renfrewshire and Barrow-in-Furness.
“To bring new jobs to Britain and drive growth across our country, we are delivering our mission to make Britain a clean energy superpower.”
But what companies and projects will be receiving these investments?
How the UK Government supports carbon capture
Carbon capture, usage and storage (CCUS) plays a key part in the UK’s Net Zero Strategy, aiming to bring the country to net zero by 2050.
In April 2022, the British Energy Security Strategy set out the government’s ambitions to deliver CCUS across industrial clusters in the UK to capture and store up to 30 megatonnes of CO2 per year by 2030.
The UK Department for Energy Security and Net Zero published an industrial carbon capture (ICC) business model and Waste ICC business model in October 2023 to support Track-1 projects.
The 2024 Autumn budget documents promise £3.9bn (US$5bn) of funding in 2025 and 2026 for CCUS Track-1 projects to decarbonise industry.
It says this also includes contracts with 11 green hydrogen producers.
CCUS and hydrogen in the East Coast Cluster
The East Coast Cluster sits in two industrial regions of the UK, Teesside and Humber.
Near the North Sea, these areas are suitably positioned to store any captured carbon under the sea floor.
The cluster has the potential to transport and securely store nearly 50% of all UK industrial cluster CO2 emissions.
It was selected by the government as one of the UK’s first CCS projects in 2021.
It contains three projects:
- Net Zero Teesside Power
- bpH2Teesside
- Teesside Hydrogen CO2 Capture
Two of these projects are led by bp, and Net Zero Teesside Power is a joint venture with Equinor.
Upon the announcement, Louise Kingham, Senior Vice President, Europe and Head of Country, UK at bp, said: “The East Coast Cluster can play a critical role in the UK Government’s levelling up ambition, supporting thousands of jobs and investing in local communities.
“Teesside and the Humber were once the industrial heart of the UK. Today’s announcement paves the way for them to become the green heart of the country’s energy transition, shepherding in the next generation of industry and ways of working.”
The project aims to create and support an average of 25,000 jobs per year between 2027 and 2050.
Net Zero Teesside is a £4bn (US$5.2bn) venture to create a natural gas-fired power plant with integrated carbon capture.
It is being created with collaborative effort from industry leaders including GE Vernova, bp and Technip.
Roger Martella, Group VP and Chief Sustainability Officer at GE Vernova, says: “We’ve been selected to provide the turbines for the Teesside Project, which will be the leading carbon capture demonstration project in the world as it moves forward.
“Our turbines probably move air faster than any equipment in the world, so this isn’t any old carbon capture technology.
“We have to build the most complex and industrialised carbon capture technology.”
bpH2Teesside aims to produce around 160,000 tonnes of low carbon hydrogen per year to displace existing natural gas consumption by industrial emitters in Teesside.
The HyNet Cluster’s CCS and hydrogen
HyNet is made up of several elements that will provide the infrastructure to produce, transport and store low carbon hydrogen across the North West of England and North Wales.
It will also contain infrastructure to capture, transport and store carbon dioxide emissions from industry.
This will be created through upgrading existing infrastructure and developing new infrastructure including underground pipelines, hydrogen production plants and storage facilities.
HyNet contains five projects:
- Hanson Padeswood Cement Works Carbon Capture and Storage Project
- Viridor Runcorn Industrial CCS
- Protos Energy Recovery Facility
- Buxton Lime Net Zero
- HyNet Hydrogen Production Plant 1 (HPP1)
The Padeswood cement works in North Wales is owned by Heidelberg Materials.
The company says that concrete is the second most consumed material on the planet after water, and the “only way to produce the cement that the UK needs, without emitting large amounts of carbon, is to capture and store these emissions.”
Mitsubishi Heavy Industries and Worley were awarded a contract for the front end engineering design of the Padeswood CCS project.
Simon Willis, CEO at Heidelberg Materials UK, said: "This is a decisive next step in our plans to install carbon capture technology at our Padeswood cement works.
“Once operational, it will provide net zero building materials for major projects across the country, enabling us to help decarbonise the construction industry and meet our ambition to become a net zero business."
In April 2024, Viridor committed more than £20m (US$25.9m) to its Runcorn CCS project and awarded Technip and Fichtner contracts for its development.
Technip will provide a design using its Canopy by T.EN solution powered by Shell CANSOLV CO2 capture technology.
James Eyton, Head of CCUS at Viridor, says: “Our Runcorn CCS project is accelerating into a very exciting phase of design development and, with new levels of investment and the signing of these two major contracts, we are in a strong position to take a big step towards bringing this project to reality.
“We have a strong team to deliver upon our objectives at this stage of the project. Deliverability is an essential goal, which Technip Energies’ well proven Shell CANSOLV® CO2 capture technology has the potential to achieve, with Fichtner on hand to provide depth of engineering expertise and assurance of delivering value for taxpayer money.”
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