UK’s first carbon capture projects signed off in North East

Thousands of new, skilled jobs will be supported in the North East of England as contracts for the first carbon capture, usage and storage (CCUS) projects in the UK are signed today (10 December). 

The East Coast Cluster in Teesside – a project that will capture and store carbon emissions from industries in the region – is now set to start construction in mid-2025, marking the latest milestone in the Government’s mission to reignite its industrial heartlands, tackle the climate crisis and turbocharge growth for decades to come. 

This investment decision comes less than a week after the launch of the government’s ‘Plan for Change’, which aims to drive economic growth and rebuild Britain.

Backing the carbon capture industry will help reignite industrial heartlands and drive investment in industrial communities such
as Teesside., the Government says.

It follows a £21.7 billion funding commitment to ensure the UK’s vision for CCUS becomes a reality in the UK.

Work is set to begin in 2025, with one of the first projects, Net Zero Teesside Power, estimated to deliver secure low-carbon energy capable of powering up to one million homes from 2028. 

The deals will unlock £4 billion worth of contracts that will be awarded by projects in the East Coast Cluster to supply chains, supporting UK businesses, driving investment in innovative technology and industries and creating opportunities for local people. 

It also brings a major boost for the UK economy, with 2,000 jobs set to be supported in the North East initially and tens of thousands more to be supported across the UK in
the coming years as the CCUS industry grows. 

Energy Secretary Ed Miliband said: “The Prime Minister was clear last week – our plan for change is going to put more money in working people’s pockets. Today’s announcement delivers both – new jobs and economic growth.

“This investment launches a new era for clean energy in Britain – boosting energy security, backing industries, and supporting thousands of highly skilled jobs in Teesside and the North East. 

“This is the Government’s mission to make the UK a clean energy superpower in action – replacing Britain’s energy insecurity with homegrown clean power that rebuilds the strength of our industrial heartlands.”

By signing these contracts with industry, the Government aims to show that its CCUS business models – developed over years in collaboration with industry –
are delivering real results by attracting investment and getting this game-changing technology off the ground. 

Building on the success of the flagship Contracts for Difference scheme, which drove the rapid growth of the UK’s offshore wind industry, these models showcase the UK’s ability to create innovative solutions to address the challenges of achieving net zero, the Government says. 

CCUS is a technology that captures carbon dioxide emissions before they reach the atmosphere – storing them safely and permanently deep beneath the seabed and preventing their contribution to climate change. 

This announcement comes as the North Sea Transition Authority (NSTA) awards the first-ever carbon storage permit to the Endurance store.

It also marks a significant milestone, as Ofgem takes over as the regulator for the CCUS economic licence, overseeing the construction of
the country’s first-of-a-kind CCUS Network.

The Low Carbon Contracts Company (LCCC) will also play a vital role as counterparty to the CCUS business models – the Dispatchable Power Agreement and the Revenue Support Agreement. 

Beatrice Filkin, Ofgem Director of Major Projects, said: “This is an important milestone in the drive towards net zero and Ofgem will play a pivotal role in ensuring that networks such as the East Coast Cluster can transport and store carbon dioxide as efficiently as possible. 

“While this is a first-of-its-kind venture in the UK, Ofgem will draw upon 30 years of experience regulating the energy market to ensure that both industry and customers see good value for money from operators of the transport and storage network. 

“The economic model that has been set out today provides long-term certainty for investors in the network and creates incentives to build the infrastructure the UK needs, at a competitive cost.”