It's that old adage: ‘If it was easy everybody would do it.’ When it comes to large-scale CCUS developments, the UK Department for Energy Security and Net Zero (DESNZ) appears to be taking a more bullish approach to CCS than most countries worldwide.

On the positive side, as this article went to press, Eni announced it had reached financial close with DESNZ for the CO₂ transport and storage system of the HyNet industrial cluster in Liverpool Bay. The deal moves the project into construction phase and supply chain contract procurement.

However, many questions remain. Only the other week, Daniel Yergin, Vice Chairman of S&P Global, said in a controversial Times article on 26 April that: ‘Experience shows that the transition will take longer than expected, will be more challenging and expensive, and will require trade-offs that tend to be downplayed.’ This certainly applies to areas such as CCUS, of which he says: ‘Competitive new low and zero-emission technologies are needed, and that will require technical and commercial advances in such technologies as carbon capture, hydrogen, geothermal, large-scale electricity storage and biofuels.’

In the meantime, DESNZ considers CCUS as ‘essential’ for the UK to meet net zero, according to a House of Commons Select Committee of Public Accounts (PAC) report on CCUS published in February 2025. The damning report came to the conclusion that: ‘There is a high degree of uncertainty whether risky investment by government will pay off.'

Nevertheless, the current CCUS programme claims to have learnt from two previous failed attempts, which were cancelled by the previous government. Notably, the new programme has managed to secure funding from the Treasury of almost £22bn over 25 years to support the first project. Although this will be nowhere near enough to cover all the developments without strong private investment, which is understandably cautious in the current economic environment.

Key project players were reluctant to let New Energy World talk directly to CCUS operators and participants despite numerous approaches, although there were written responses from spokespersons.

What’s more, the Committee notes that the DESNZ has ‘reduced its ambitions’ for the amount of carbon that the programme will capture and store. Last December, it stated that its ambition to capture and store 20–30mn t/y was ‘no longer achievable’, but has not set any revised targets so far.

Indeed, progress on introducing the CCUS programme has been slow, and DESNZ has only signed contracts with two projects in the north-east – one a major carbon emissions emitter, NZT Power (NZTP), and one a capture, transport and storage company, the Northern Endurance Partnership (NEP) – around two years later than planned, and now one in the north-west. There are hopes that these will become operational by 2028. But ‘the Department is reliant on the technology working to contribute to achieving net zero but cannot be sure how these first-of-a-kind projects will perform’, says the report.

There is also a question around the high commercial risk being undertaken by a UK government facing serious economic challenges. With questions remaining unanswered about the willingness of private investors to step into the breach, without significant return on investment and big risks down the line if any carbon storage leaks.

Indeed, the report suggests that DESNZ ‘will need to find alternative ways for reducing emissions if there are further delays in agreeing support for more CCUS projects, or if the technology’s performance is not as good as it expects’.

There is a high degree of uncertainty whether risky investment by government will pay off.

Where do the programmes stand? 
CCUS is designed to handle a range of ‘hard-to-abate’ industrial emissions applications, such as power generation and cement production.

The current approach is targeted at two geographical clusters. Under track one, announced in October 2021, the first two clusters to receive government support are HyNet, covering Merseyside and north Wales, and the East Coast Cluster, covering Teesside and Humberside. Funding up to £21.7bn has been earmarked by the Treasury over 25 years to cover the first five projects. In line with Energy Secretary Ed Miliband’s express enthusiasm for net zero, the Department has also recognised contingent liabilities of up to £34bn to cover the risks in underwriting for the programme.

Three-quarters of the budget will come from levies on consumers, but the PAC report finds the government has not yet looked at the financial impact of CCUS on households.

PAC Chair Sir Geoffrey Clinton said: ‘Government is gambling on carbon capture technology becoming foundational in achieving net zero… It must now ensure that it has not sown the seeds of its failure with this approach, by making sure that it can direct support to sectors or locations outside of these clusters.’

The two carbon capture sites are designed to create 4,000 jobs directly and support a further 50,000 jobs in the north-west and north-east of England in the long-term. They will also kickstart the UK as a pioneer in cleantech excellence globally, and bring up to £8bn of investment into these communities, according to Prime Minister Keir Starmer, speaking at an International Investment Summit at the start of the year: ‘Turbocharging growth for decades to come.’

So where are we now in terms of progress?

Net Zero Teesside 
By March 2024, NZTP and NEP had selected contractors for eight contract packages with a combined value of £4bn. These include Technip Energies, GE Vernova and Shell for onshore power, capture and compression; Costain for the onshore CO₂ gathering system and gas connection; Marubeni-Itochu Tubulars Europe, Liberty Steel and others for linepipe; Saipem for the offshore pipeline; TechnipFMC for offshore subsea injection; Alcatel for power cabling; Genesis for offshore systems engineering; and Wood for project management.

NZTP is a joint venture between BP and Equinor, aiming to generate up to 860 MW of flexible, dispatchable low-carbon power, to meet the requirements of up to 1.3 million homes, and capturing up to 2mn t/y of CO₂ at the plant for transport and storage by NEP beneath the North Sea. NEP is a joint venture between BP, Equinor and TotalEnergies as the CO₂ transport and storage provider for the East Coast Cluster. The Teesside onshore NEP infrastructure will serve NZTP, H2Teesside and Teesside Hydrogen CO₂ Capture as the first connection to the East Coast Cluster.

According to a BP spokesperson: ‘H2Teesside aims to be one of the UK’s largest blue hydrogen production facilities, targeting 1.2 GW of hydrogen production capacity by 2030 with the initial phase of 600 MW. H2Teesside reached a number of progress milestones in 2024, including agreeing the Statement of Principles of DESNZ to allow the project to enter the final stage of negotiations for a low-carbon hydrogen agreement. The project is currently at the examination stage of the Development Consent Order (DCO) process, inviting anyone who has registered to have their say to submit comments.’

In terms of the key technologies, BP and BASF have signed a licence agreement for the use of BASF’s gas treating technology, OASE white, to capture CO₂ during hydrogen production at H2Teesside. The technology is used in many ammonia, hydrogen and carbon monoxide plants across the world, and is claimed ‘to bring improved energy efficiency to the blue hydrogen process’.

In NTZP’s proposed power station and carbon capture plant, a consortium of Technip Energies and General Electric, with Shell as subcontractor, will provide Cansolv amine-based CO₂ capture technology, along with Balfour Beatty as nominated construction partner.

NEP’s planned Teesside high pressure CO₂ compression and export facilities will be led by a consortium of Aker Solutions Doosan Babcock and Siemens Energy, using Aker CO₂ capture technology.

NEP says there are increasing signs of interest from potential industrial users. ‘We’re seeing strong interest from potential industrial users for hydrogen from H2Teesside to help decarbonise industry. H2Teesside aims to supply a diverse range of customers, those already established in the region as well as new businesses attracted to this low-carbon hydrogen produced at scale.’ DESNZ is expected to set out a selection process for further expansion from 2025.

Potential storage locations 
And which depleted North Sea oil and gas fields have been identified for storage?

‘As part of the East Coast Cluster, the intention is for carbon capture at H2Teesside to be safely transported via the NEP and stored in the Endurance [field] store in the North Sea. This is a saline aquifer, located about 145 km offshore Teesside, that can store up to 450mn tonnes of CO₂. Other potential stores nearby could take capacity from the East Coast Cluster to around 1bn tonnes of CO₂.’

Carbon Capture Journal says NEP has applied for four carbon storge licences in the southern North Sea, with the Endurance field located closest to shore and, as mentioned, plans to inject up to 4mn t/y of CO₂ for 25 years. According to James Hamilton-Wright, a well planning geologist for BP, speaking at the Geoscience Energy Society for Great Britain last December: ‘There are many hazards and infrastructure in the region, including a 1,400 MW electricity interconnector cable crossing the site called the Viking Link, and sand banks which limit where the wells and flowline can be placed on the seabed… Additional sites provide flexibility to shift around CO₂ storage if it becomes clear that certain sites are better.’  

NEP contends that its project partners’ expertise makes them up to the challenge of facing a ‘world first project’ on a commercial site. According to the NEP spokesperson: ‘BP has a proven track record of effectively delivering and operating large-scale complex projects on a global scale. Our experience means we understand the risks associated with hydrogen, and many other substances we handle daily, and understand best practice to keep our employees, and those that work and live close to us, safe.’

In the light of BP’s express intention to reduce investment on renewable initiatives in order to focus on conventional oil and gas plays, New Energy World enquired whether there will be a refocus on its CCS plans.

To which BP replied: ‘In hydrogen and carbon capture, BP is focusing on high-graded projects, prioritising 5–7 projects for this decade. In the UK, our focus is on significant projects in Teesside – NZT Power, NEP and also H2Teesside (blue hydrogen). Therefore, we are no longer progressing our plans to develop HyGreen.’ Previously, BP was aiming to ‘take a leading position’ as an integrated low-carbon hydrogen provider in Hygreen Teesside, targeted to capture at least 10% of key markets by 2030.

In January, DESNZ awarded an economic licence to Net Zero North Sea Storage. The permit allows for first injection of CO₂ by 2027.

NEP and NZTP both announced financial close in December 2024, giving the green light to proceed to the execution phase. Construction is expected to commence from the middle of 2025, with start-up expected in 2028.

A matter of regulation 
NEP says it has been granted the first CO₂ transport and storage licence in the UK under the Transportation and Storage Regulatory Investment regime – a regulatory regime that unlocks private investment in long-term infrastructure by providing incentives and protections in developing a nascent CCUS market in the UK. NEP has also been granted a CO₂ storage permit by the North Sea Transition Authority which will enable CO₂ injection and storage to commence when the infrastructure is complete. And NZTP has entered a dispatchable power agreement – a contractual framework based on the contracts for difference (CfD) standard terms and conditions but adapted to enable natural gas-fired power with CCS to play a mid-merit role in meeting electricity demand, displacing unabated thermal generation plants.

• Further reading: ‘On the front lines of the skills shortage’. A four-storey carbon capture plant installed in a university building trains the next generation of engineers about measurement and process control, while the latest generation of instruments provides data aimed to ease their workloads. New Energy World Senior Editor Will Dalrymple goes back to college to learn more.
• Find more about how to overcome the technical challenges of carbon capture projects.