Britain Promises Up To $28.5 Billion For Carbon Capture Projects

By Susanna Twidale

LONDON (Reuters) -Britain will provide funding of up to 21.7 billion pounds ($28.5 billion) over 25 years to develop carbon capture and storage (CCS) projects to curb emissions from industry and create new jobs in northern England, the government said on Friday.

Britain has a climate target to reach net zero emissions by 2050 and has said CCS will be needed to curb emissions from energy intensive industrial sectors.

It also hopes backing the technology will help reinvigorate the country's industrial regions and provide much needed investment and jobs.

"Carbon capture technology is not just about cleaning up our industry and our energy sector. It is a massive opportunity to attract investment and create thousands of skilled jobs," finance minister Rachel Reeves said when announcing the funding in Liverpool.

The government said it expects the decision to attract 8 billion pounds of private investment into the communities and create 4,000 jobs directly for the communities hosting the projects.

CCS involves capturing emissions from power plants and industry to enable them to be stored underground. The technology has been available for years but projects globally have failed to take off due to high costs and questions over the amount of carbon being captured.

Britain’s conservative government that was voted out of office in July had in 2023 promised 20 billion pounds of CCS funding that was never fully awarded.

The two sites in northern England will have a combined annual carbon capture capacity of 8.5 million metric tons a year, equivalent to taking 4 million cars off the road, the government said.

The HyNet North West cluster in Merseyside seeks to capture emissions from industrial plants and store them in depleted gas fields in the Irish Sea. It is being developed by a consortium led by Italian energy group Eni.

"HyNet… will decarbonise one of the key energy-intensive industrial districts as well as unlock significant economic growth in this region of the UK," Eni CEO Claudio Descalzi said in a statement.

Oil and gas majors Equinor and BP are involved in developing a project in Teesside that would store captured emissions under the North Sea.

Green groups criticised the decision.

"For a government that is committed to tackling the climate crisis, 22 billion pounds is a lot of money to spend on something that is going to extend the life of planet-heating oil and gas production," said Greenpeace UK’s policy director, Doug Parr.

($1 = 0.7625 pounds)

(Reporting By Susanna Twidale; editing by Barbara Lewis and Hugh Lawson)