The CCSA has submitted our response to the Comprehensive Spending Review.
The response underscores the vital role of government support for CCS in boosting economic growth and positioning the UK as a clean energy superpower, aligning with the development of the government’s Industrial Strategy, Missions and Infrastructure Strategy.
Key economic benefits identified include the production of low-carbon products, export potential for CO2 storage, job creation and protection, and overall sectoral GVA growth.
Also included in the submission are several case studies, focused on different opportunities presented by support for CCS. Note, due to commercial sensitivities, these case studies are redacted from what can be viewed here, but were provided direct to Treasury.
Accompanying the report, the CCSA will also be submitting our soon to be published report on Cost Reductions.
The CCSA identified cross-cutting actions for government to avoid the risk of deindustrialisation and unlock the significant opportunities and benefits of CCUS for the UK:
- Provide long term certainty and commit funding to deliver the selected Track-1, Track-2 and Track-1 Expansion projects, alongside other CCUS projects delivering on the same timescales within the spending review period. To do this Government should:
- Commit to an average annual support envelope of £4.2bn per year between 2028-2045
- Provide a clear and predictable timetable for future allocation rounds
- Advance progress on enabling NPT based projects to be able to take part in CCS allocations.
- Government should also work towards developing wider enabling markets, which will further support CCS deployment. This should include:
- Accelerate delivery of comprehensive carbon markets, both in the UK and internationally, by ensuring the UK ETS carbon price remains stable, predictable, and aligned to net zero ambitions, this includes enabling trading of negative emission in the ETS
- Continue work to address barriers to a cross-border carbon market with Europe, enabling the UK to take full advantage of its significant geological CO₂ storage potential as part of growing trade opportunities with the EU
- Establish low carbon product markets through non-fiscal measures including low carbon standards and green public procurement obligations, to drive demand and private investment
- Protect UK industries from carbon leakage through continuing to explore UK and EU ETS alignment, alongside delivering a robust CBAM in 2027. This will require clarity on inclusion of sectors currently out of scope of the CBAM (e.g. refining, glass, ceramics). Further clarity is also needed on the interaction of the CBAM with the UK ETS free allocations and implementation of the EU CBAM.
The CCSA are now following up our submission with engagement with civil servants and ministers over the next few weeks.
Thank you to all members who have provided detailed feedback and case studies in this submission.
Read the CCSA response here.