Action needed for UK to capitalise on fledgling CCS sector

Offshore Oil CCS

Supply chain companies in the UK offshore oil and gas sector are in prime position to win work in carbon capture and storage (CCS) if urgent action is taken by governments and industry, a new report has found.  

CCS has been recognised as a critical technology to help energy intensive sectors, like cement and power generation, meet their net zero goals. The Government’s Net Zero Strategy says the UK will need to capture 50 million tonnes a year by 2035.    

The report, commissioned by the Department for Business, Energy and Industrial Strategy (BEIS) and produced by industry body OEUK through the North Sea Transition Deal, finds that offshore oil and gas supply chain companies already have some capabilities in areas including plant design and engineering, plant fabrication, and construction. 

It identifies 13 actions for government and industry, including the need for support from government through early-stage funding and additional licensing rounds. Among the findings, the report shows that the UK has most of the components necessary for a successful CCS sector; a big potential market for exports of technology and expertise; large industrial clusters; extensive gas transport infrastructure; and a good scientific understanding of the geological requirements needed for long-term CO2 storage.

The report also found that CCS could be worth £20 billion to the offshore oil and gas supply chain in the next ten years, and £100 billion by 2050. The UK has an estimated total storage capacity of 78 gigatons, one of the largest in Europe and enough to hold two centuries’ worth of the UK’s current emissions 

However, the report also warns that the government should speed up Track 2 clusters and introduce additional licencing rounds for storage sites . The supply chain, although suitably experienced, is fragile and the UK is at risk of losing it to more attractive opportunities elsewhere in the world if it does not secure a first-mover advantage.

Securing this work in the UK will particularly benefit communities in Aberdeen, Inverness, Liverpool, North Wales, East Anglia, Lincolnshire, Yorkshire and Teesside, where the existing offshore energy industry is well-placed to expand into new sectors, including CCS. 

OEUK supply chain and operations director, Katy Heidenreich, said: “Carbon capture and storage is going to be a key tool in our fight against climate change. It offers a huge opportunity for the UK offshore energy supply chain to help energy intensive industries cut emissions. If we get this right, it could unlock £100 billion of work for UK manufacturing employers by 2050. This will support UK jobs, cut emissions, boost the economy and develop skills which can be exported globally.   

“Lots of progress has been made, but without urgent action the UK will miss out on the opportunity to secure a leadership position in this exciting new sector. Our report sets out how we will continue to work with government to seize a first mover advantage, benefitting the economy, jobs and local communities while achieving our net zero goals.” 

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