Comment by Emily Ford, Senior Energy Policy Advisor – Carbon Policy, at Energy Systems Catapult.

Globally, there are now around 45 operational carbon capture and storage (CCS) facilities, which together capture over 50 MtCO₂ annually. CCS is an important part of the puzzle for industrial decarbonisation. While some of industry is able to decarbonise by switching fossil fuels to electricity or hydrogen, for industrial sectors which cannot avoid producing process emissions, CCS is one of the only viable options. Energy Systems Catapult’s modelling estimates that in 2050, UK industry will still be producing 14 to 16 MtCO₂ per year in residual emissions – and CCS will be essential for removing these.

There are four key priorities needed to put industrial CCS into action:

• Scaling up CCS operations and innovation
• Bringing down the cost of CCS
• Enabling efficient CO₂ transport
• Integrating industrial CCS into the whole system

1. Scaling up CCS operations and innovation

As a result of innovation in the CCS sector, current technologies are able to capture over 90% of CO₂ emissions in certain industrial applications. Each successive round of CCS plants will, ideally, capture more tons of CO₂ per £ outlaid than its predecessor. To achieve this, the CCS sector will need to continue scaling up plant capacity, and innovating to develop even more efficient processes. Over the past 20 years, the government has spent £371 million on CCS research, development and demonstration. Further support is needed for early deployment and to grow CCS supply chains, as has been achieved within the renewables sector. The government’s latest CCS business models operate similarly to those for renewables, using a CfD-like structure of long-term contracts, in order to provide all-important certainty for operators over a longer time horizon.

As industry and other sectors scale up their CCS activities, the UK is in an advantageous position to store the growing volumes of captured carbon. Thanks to capacity in the North Sea and elsewhere on the continental shelf, the UK has an estimated offshore CO₂ storage capacity of 78 billion tonnes. This is more than sufficient to meet domestic needs and potentially to support international storage services in the future. As such, the UK and EU are looking to agree a regulatory framework which would enable cross-border CO₂ transport and storage networks.

2. Bringing down the cost of CCS

The cost of CCS is a barrier to its deployment, and we are unlikely to see significant cost reductions without deployment at scale and iterative improvements, in much the same way as early offshore wind projects. Currently, its cost is significantly higher than the UK carbon price – meaning CCS is simply not commercially viable for many industrial sectors. Industrial capture costs typically range from £60 to £120 per tonne of CO₂, depending on the sector and technology. The UK Emissions Trading Scheme (UK ETS) carbon price averaged £41.84 in 2024.

As such, CCS projects continue to require additional financial support which the government has sought to provide, including in the form of CCS business models and direct public funding. This year’s Spending Review committed £9.4 billion for CCS, which represents the first tranche of £21.5 billion pledged over the next 25 years.

The government has also confirmed that greenhouse gas removals (GGRs) will be integrated into the UK ETS from 2029. We would expect this integration to be a key enabler for wider deployment, and to incentivise further private sector investment. In Innovating to Net Zero 2024, the Catapult’s modelling finds that GGRs are a part of any cost-effective, credible Net Zero pathway, and indeed that without them, it will not be possible for the UK to reach Net Zero. This is in line with modelling from the UK’s Climate Change Committee as well as internationally, from the United Nations Intergovernmental Panel on Climate Change.

3. Enabling efficient CO₂ transport

By 2050, thousands of miles of CO₂ transmission network will be required to support the required levels of carbon capture. Given the capital cost of CO₂ pipeline infrastructure, this will require significant strategic planning. In its recent Industrial Strategy, the government committed to hold a future consultation on access to this infrastructure to help guide that planning.

Whilst CO₂ pipelines will be critical, dispersed industrial sites – those located outside of the major clusters – are significantly less likely to be able to access this infrastructure. For certain dispersed sites, CCS may still be able to play a role in their decarbonisation, if non-pipeline transport options become both technologically and financially feasible. Moving captured carbon by road, rail or ship still faces logistical hurdles, and is another topic which the government has earmarked for consultation later this year. The Track 2 CCS projects, Acorn in Scotland and Viking in the Humber, plan to receive CO₂ by non-pipeline transport once operational.

4. Integrating industrial CCS into the whole system

Successful deployment of industrial CCS is not only a question of understanding which CCS technologies are most suitable for different industrial sites and sectors, but also of understanding how their deployment fits in with wider system needs. In particular, the degree of locational and temporal flexibility which industrial capture plants can offer will significantly impact their integration into our energy system. Locational flexibility is the ability to capture carbon further away from storage injection points or pipelines, and will depend on the roll-out of non-pipeline transport options. Temporal flexibility, running CCS plants at times of lower energy demand, has the potential to support grid capacity. As CCS deployment ramps up, it will also be important to consider opportunities for flexibility within the CO₂ network itself. The system integration of CCS is, in part, a role for the National Energy System Operator (NESO), including through its Strategic Spatial Energy Planning (SSEP) and Regional Energy Strategic Planning (RESP).

At the Catapult, we have significant expertise in whole systems modelling and analysis. We use this to support industrial and CCS sites better understand how their operations impact, and are impacted by, the wider energy system, as well as the policy and planning decisions surrounding it. Our Energy Systems Modelling Environment (ESME) is the UK’s leading techno-economic whole system model, and provides evidence for industry, academia, government and the Climate Change Committee. It models the strategic role of energy assets on the UK’s path to Net Zero, including, for example, the role of CCS in energy from waste. More specific models such as ESME Industry has provided the modelling for the Scottish Net Zero Roadmap across both a site and regional level, whilst ESME Networks enables us to examine CCS networks, transport and distribution.

Making industrial CCS work

The UK is well-positioned to build a sizeable market for CCS, with the potential to reap the benefit of significant investment and employment opportunities. Industry is leading the CCS charge, with preparations and infrastructure projects already underway. To explore more about CCS’s role in supporting your organisation’s decarbonisation strategy, or to understand where and how it can be deployed across the UK, contact Energy Systems Catapult.