In October 2021, the UK Government announced the two Carbon Capture, Utilisation and Storage (CCUS) clusters which would be funded and supported. The Scottish Cluster (also known as the Acorn project) was not selected at this stage but placed on the reserve list, at time of writing the only cluster designated on the reserve list. In the Spring Budget on 15 March 2023, the Chancellor announced that the funding to support the development of CCUS in the UK would be increased to £20 billion, and that a shortlist for projects for CCUS deployment would be announced later this month.
This blog gives an overview of CCUS, the proposals for the Scottish Cluster and how this links to Scotland’s climate ambitions and the aims of the Just Transition.
Carbon capture and storage: what is it?
Carbon capture and storage (CCS) refers to the process of capturing carbon dioxide (CO2) either from point of emission sources or directly from the air and storing it on a permanent basis. Large scale-storage could take place either in old oil and gas reservoirs or in saline aquifers (porous rock containing salt water). It is sometimes expressed as carbon capture, utilisation and storage (CCUS) with CO2 used in, for example, the food and medical sectors.
CCS has been in operation on a small number of offshore oil and gas platforms for many years as part of the process of oil and gas extraction. In net zero planning, CCS is seen as having a number of potential roles:
- With gas power plants: to decarbonise thermal power plants using fossil fuels.
- With industrial processes: as a means of lowering emissions in ‘hard to decarbonise’ industrial processes.
- Bioenergy CCS: using bio-products such as wood pellets to produce electricity with CCS.
- Direct air capture CCS: where CCS is used solely for the purpose of capturing CO2 from the atmosphere as opposed to being used alongside an energy utilisation or conversion process.
- Hydrogen production: so-called blue hydrogen production involves natural gas used in steam methane reformation alongside CCS.
Bioenergy CCS and Direct air capture CCS are sometimes termed as ‘negative emissions technologies’ as they either capture CO2 direct from the atmosphere or the carbon captured during the growth of the bioenergy, is then re-captured and stored by CCS.
CCS in Scotland and the UK
The Scottish Government is expecting CCS to contribute significantly to overall net zero. In the Scottish Climate Change plan update from 2020, ‘negative emission technologies (NETs)’ (a term capturing various process using CCS) are forecast to reduce overall GHG emissions by 24% in 2032 (the last year of the plan). In the Climate Change Plan update it is CCS that largely permits the use of ‘net’ rather than absolute zero targeting, as all planned NETs include a form of CCS. The Climate Change Plan update also highlights the Climate Change Committee’s (CCC) view that there is ‘relatively greater potential’ for NETs in Scotland (than the rest of the UK). The chart below sets out the impact that NETs are expected to have on Scottish emissions in 2032:
CCS is not accepted by all as a technology necessary to the achievement of decarbonisation. For example, Friends of the Earth Scotland have contrasted the scarcity of current deployment of CCS with the heavy reliance on the technology in Scottish net zero plans. The emphasis on its usage is seen as a distraction from the need for a greater focus on renewable energy technologies.
The project which proposes to utilise the existing oil and gas infrastructure to transport CO2 from the St Fergus Terminals in North East Scotland to oil and gas fields in the North Sea is known as Acorn. The term is sometimes used interchangeably with the ‘Scottish Cluster’ – Acorn is a key component of the Scottish Cluster, but the Cluster also includes additional industries in Scotland who are emitters of CO2, covering a wide range of sectors in the Scottish economy including whisky, transport, chemicals, energy and academia.
The Acorn project has already received tens of millions in funding from the UK and Scottish Governments to support the development of the business case and feasibility studies.
Scottish and UK government positions on Acorn and the Scottish Cluster
While there are concerns about the reliance on CCS, the UK and Scottish governments are supportive and have provided support for CCS cluster projects across the country.
The development of CCS clusters relies on ‘conveniently located CCS infrastructure’ (networks to transport captured carbon) and it is not thought that the Scottish Government has all the necessary ‘regulatory and legislative powers’ to develop this infrastructure. The development of CCS in Scotland, therefore, depends on the support of the UK Government.
The UK Government’s ‘10 Point Plan for a Green Industrial Revolution’ committed to deploy two CCS clusters by the mid-2020s and four by 2030. The system of support involves prioritising clusters using a tracked sequencing process. In 2021 the first clusters to receive support were the East Coast Cluster (stretching from Teesside to Humberside) and the HyNet Cluster (Merseyside and North Wales). A Scottish cluster was placed on the reserve list meaning it met the eligibility criteria but was considered secondary to the chosen clusters. The UK Government retained the option to enter negotiations with the reserve cluster if the ‘affordability envelope could support an additional Track-1 cluster, or if a technical fault is discovered in one of the Track-1 clusters’. This decision itself and the decision-making criteria were criticised at the time.
What support has been announced for the Scottish Cluster?
The Scottish Government has offered £80 million for the CCS cluster in the North East. This funding is conditional on UK Government support and cannot be taken forward until there is ‘clarity on the track 2 status, what the timeline for that project will be’.
Ineos and Petroineos signed a memorandum of understanding with the Scottish cluster in July 2021. This proposed that operation of the system would be from Grangemouth, and would be operational from 2027, capturing and storing up to one million tonnes of CO2 by this date. Following this announcement, Ineos announced a further investment of £1 billion in the site with the aim of capturing and storing at least 1 million tonnes of CO2 annually by 2030, using the Acorn project to store this CO2 in the North sea.
The chart below sets out the key milestones related to the development of the Acorn project and the Scottish Cluster.
Scrutiny of the Acorn project in the Scottish Parliament
The Net Zero, Energy and Transport Committee held a short inquiry in December 2021 following the decision not to award the Scottish cluster track 1 status, and wrote to the UK and Scottish governments in March 2022.
The UK Government Minister of State for Energy, Clean Growth and Climate Change write back to the Committee acknowledging that CCUS is in the UK Government’s view ‘essential to meeting the UK’s 2050 net zero target’. The letter also noted that work was ongoing to develop the Track-1 sequencing process, and that details for the Track-2 process would be brought forward in due course.
The Scottish Government Cabinet Secretary for Net Zero, Energy and Transport noted that the CCC have described the development of CCUS as ‘a necessity, not an option’, and highlighted the potential for CCUS to support the transition to net zero while also protecting high quality skills in industrial clusters in Scotland. Scottish Government economic analysis suggests that CCUS could lead to Scottish GDP being between 1.3 and 2.3% higher by 2045 than it would be without.
The Economy and Fair Work Committee are currently holding an inquiry into the Just Transition with a focus on the Grangemouth area, and witnesses have highlighted the importance of the Scottish cluster in securing high quality work in the Grangemouth industrial cluster as Scotland transitions to a net zero economy. Forth Ports noted that:
From a policy point of view, the moving of the Acorn project, in conjunction with the UK Government, off the reserve list and into the agreed funding position would be a huge step towards meeting Scotland’s target to achieve net zero by 2045. Ineos, which is our neighbour at Grangemouth and is a huge customer of the Forth Ports group, is committing vast sums to the development of hydrogen and carbon capture technology. It has already made the commitment, for example, to a baseload of 1 million tonnes a year to the Acorn project in terms of capturing and then feeding that carbon up the gas pipeline to St Fergus.
What is next for the Scottish Cluster?
Ahead of the UK Spring Budget there had been speculation in the media that there may be an announcement on support for the Scottish Cluster. Following its publication, the Deputy First Minister wrote to the Prime Minister to note his disappointment that there was no explicit reference to progressing the Scottish Cluster. While we await details on UK Government decisions on the shortlist for track 1 support, questions remain about what support if any will be forthcoming, the timing of this support and whether it will align with the Scottish Cluster (and Scottish Government’s) ambitions in relation to CCUS in Scotland.
Andrew Feeney-Seale and Niall Kerr, Senior Researchers, SPICe
“grangemouth” by _gee_ is licensed under CC BY 2.0.