UK confirms $28.5bn funding for two CCS, H2 clusters

Spanish Market: Emissions, Hydrogen
04/10/24

The UK government has finalised a commitment to provide £21.7bn ($28.5bn) over the next 25 years to two planned clusters for carbon capture and storage (CCS) and connected projects, including for hydrogen production.

The government has reached "commercial agreement with industry" for development of the clusters, it said today.

The funding will go to the HyNet cluster in northwest England and the East Coast cluster in England's northeastern Humber and Teesside regions. The two projects were selected as "Track 1" priority clusters in 2021 and could together store some 650mn t of CO2. They could attract £8bn of private investment, the government said today.

"The allocation of funding marks the launch of the UK's CCS industry," according to Italy's integrated Eni, which leads the development of HyNet's CO2 transport and storage system. Eni in February gave a start date of 2027 for HyNet.

The East Coast cluster is led by the Northern Endurance Partnership, a joint venture between BP, TotalEnergies and Norwegian state-controlled Equinor.

A range of projects will connect to the two hubs to transport and permanently sequester the carbon. These will include hydrogen production projects and supporting infrastructure.

HyNet will involve projects developed by EET Hydrogen, a subsidiary of Indian conglomerate Essar, which is planning to bring a 350MW plant for hydrogen production from natural gas with CCS online by 2027 and another 700MW facility by 2028. The hydrogen will be partly used at EET Hydrogen's sister company EET Fuels at its 195,000 b/d Stanlow refinery but some will also be delivered to industrial consumers in the area. The HyNet cluster includes plans for 125km of new pipelines to transport hydrogen.

The East Coast cluster involves Equinor's [600MW H2H Saltend] project and BP's 160,000 t/yr H2Teesside venture. German utility Uniper's 720MW Humber H2ub (Blue) project, UK-based Kellas Midstream's 1GW H2NorthEast plant and a retrofit facility from BOC, which is part of industrial gas firm Linde, could also connect to the cluster for CO2 storage. All the projects are due to enter into operation before the end of this decade.

The funding confirmation for the CCS hubs "is a vital step forward, catapulting hydrogen towards long-term certainty we need in the UK", industry body the Hydrogen Energy Association's chief executive Celia Greaves said.

The previous government last year picked two "Track 2" carbon capture clusters that are scheduled to start operations by 2030 — the Acorn facility in Scotland and the Viking project in northeast England.

By Stefan Krumpelmann

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