Alongside the ongoing and increasing use of renewable energy sources, the government are investing in carbon capture, usage and storage (CCUS), demonstrated with the expansion of the HyNet CCUS cluster
This indicates further procurement opportunities are on the horizon in the renewable energy sector.
What is carbon capture, usage and storage?
CCUS aims to prevent carbon dioxide (CO2) produced from industrial processes and power stations from being released into the atmosphere. These include nature-based initiatives including increased tree planting, rock weathering, and a seaweed farm reported in the South Atlantic Ocean. These methods are ‘negative emission’ technologies by removing CO2 from the atmosphere. [1]
The likes of the International Energy Agency (IEA) and the Climate Change Committee see CCUS as a key element to meet carbon reduction/climate change targets, however in the UK, the government faces pressure for allocation of funding to the relevant schemes.
The scale of carbon capture needed for impactful change is also an intimidating factor. BBC News reported ‘based on projections of oil and gas use under current policies… an “implausible” 32 billion tonnes of CO2 a year by 2050 would need to be captured’ [2]. With the cost of this innovation, there is a renewed hesitation from governing bodies, to such an extent that campaigners have accused government schemes of “greenwashing”.
Carbon Capture in governmental policy
The changes in government policy provide an insight to the future pipeline of CCUS contracts. Despite Ed Miliband first announcing plans to develop CCUS for power plants in 2009, little progress has been made since in the UK. Following the election in 2024, Labour have now pledged nearly £22bn[3] for projects to capture and store carbon emissions from energy, industry and hydrogen production, indicating a shift towards the prioritisation of carbon capture as a matter of environmental urgency.
Kier Starmer announced in February 2025 the need to allocate investment in Scotland’s industrial future for Grangemouth, assigning £200m from the National Wealth Fund. This is a hopeful image, of returning some of the material wealth from the National Wealth Fund into tangible opportunities for prosperity and could open up private investment.
Carbon capture in England
With the planned East Coast Cluster, carbon capture projects across Teeside and the Humber, construction is expected to begin later this year. This includes the Net Zero Teesside Power project – poised to be the world’s first gas-fired power station with carbon capture and storage. Other upcoming projects include two transport and storage networks carrying captured carbon to deep geological storage in Liverpool Bay and the North Sea.
The government hopes that this move would give industry confidence to invest in the UK, attracting £8bn of private investment, directly creating 4,000 jobs, supporting 50,000 jobs in the long term and helping to remove 8.5 million tonnes of CO2 each year – with planning carbon storage from 2028.
The future of CCUS in Scotland – driving their renewable energy usage
The push for funding behind Project Acorn
Project Acorn, which has been under development for over a decade, involves a CCUS project at St Fergus, Aberdeenshire, sourcing greenhouse gas emissions in depleted gas reservoirs under the North Sea. Support for the project was redirected in 2021 and Project Acorn was placed on a reserve list for future backing. In June 2025, £200m was confirmed to progress the scheme, although no firm timescales were set. [4]
In a letter to Chancellor of the Exchequer Rachel Reeves signed by entities including oil tycoon Sir Ian Wood and the Scottish Chambers of Commerce, the UK government is compelled “to commit, in its comprehensive spending review, to progressing Scotland’s only opportunity for industrial decarbonisation, the Acorn CCS Project, as an immediate priority… Scotland must not be left behind.”[5] A final investment decision will be taken later this Parliament.
Grangemouth
On Tuesday 18th February 2025, Scotland’s first minister stated that his government was prepared to commit £25 million ‘to establish “a just transition” fund for Grangemouth’, a site which provides a “huge opportunity for renewal”.
Despite the optimistic implications of the Willow project at Grangemouth, the inherent threat of closure to Scotland’s only oil refinery, and the consequent threat of 400 redundancies, sows doubt around its benefit for the surrounding community. However, as reportedly stated in the letter to Rachel Reeves, ‘failing to act now’ in funding large-scale decarbonisation projects such as Grangemouth and Project Acorn ‘threatens thousands of jobs, billions of pounds of investment, and economic growth’[6]. This places the UK government in a difficult position: choosing between investment in a comparatively untested decarbonisation industry, or favouring established industries such as oil refinement.
Awareness of the unemployment threat has led EY to brainstorm ideas for development at Grangemouth with private sector investment, including bioengineering, biofuels, or hydrogen energy, all of which would make much needed alterations to the renewables landscape in the UK.
What does the future look like?
As countries are setting ambitious targets to meet their climate goals, it is essential the renewable energy sector continues to grow – with the potential for a fruitful pipeline of renewable energy projects. Although we’ve discussed the UK, other countries in Northern Europe such as Norway and Denmark are also emerging as hubs for CCUS projects[6]. With climate change as an increasing threat to the environment, it is essential investment for these projects continue to lead the way for a more sustainable future.
- https://www.bbc.co.uk/news/articles/c4g0xnnwkppo?gad_source=1&gclid=EAIaIQobChMIj4TGnLqbjAMVuptQBh3vLg9zEAAYASAAEgIhKPD_BwE&gclsrc=aw.ds
- https://www.bbc.co.uk/news/science-environment-64723497
- https://www.bbc.co.uk/news/articles/c4g0xnnwkppo?gad_source=1&gclid=EAIaIQobChMIj4TGnLqbjAMVuptQBh3vLg9zEAAYASAAEgIhKPD_BwE&gclsrc=aw.ds
- https://www.bbc.co.uk/news/articles/cd92kp0j08xo
- https://www.scottishconstructionnow.com/articles/business-leaders-unite-in-call-for-uk-government-action-on-acorn-carbon-capture
- https://www.dnv.com/article/the-future-of-ccus-key-trends-and-regional-developments-in-northern-europe/