Government targets ‘new era for clean energy’ with £22bn for carbon capture – but other solutions also needed

The government announced a “new era for the clean energy industry” today (4 October) with £21.7bn for two carbon capture sites in North West and North East England.

The investment, spread over 25 years, will fund carbon capture, usage and storage (CCUS) deployment at the East Coast Cluster in Teesside (backed by oil companies including BP and Equinor) and HyNet North West in Merseyside. The two clusters aim to decarbonise heavy industry by capturing carbon emissions before they reach the atmosphere. Other projects will include power generation with carbon capture and low-carbon hydrogen production.

Captured carbon dioxide (CO₂) emissions will be stored beneath the seabed, the government said, where there is estimated capacity for 200 years’ worth of emissions.

Prime minister Keir Starmer said: “We’re reigniting our industrial heartlands by investing in the industry of the future. For the past 14 years, business has been second-guessing a dysfunctional government – which has set us back and caused an economic slump.

“Today’s announcement will give industry the certainty it needs – committing to 25 years of funding in this ground-breaking technology – to help deliver jobs, kickstart growth, and repair this country once and for all.”

The investment will create 4,000 jobs and support another 50,000 in the long-term, the government announcement said, all while removing 8.5m tonnes of emissions per year – the equivalent of taking 4m cars off the road.

“CCUS is a tool in our armoury of technologies, which we need to decarbonise parts of energy that we currently can’t do with clean electricity, such as major industrial processes,” said Emma Pinchbeck, chief executive of trade association Energy UK.

“The energy transition is gathering pace, and the development of CCUS here for industrial processes unlocks inward investment, creates jobs and helps areas with a proud history of engineering and industry pioneer the technologies of the future in the UK.”

Other groups have criticised the investment, however, saying the money would be better spent elsewhere. The technology is still immature, with major challenges around high energy consumption, scaling up, and the security of long-term storage. Critics have pointed out that even if carbon emissions are captured from power plants, extracting fossil fuels has other associated emissions, including high levels of methane.

“Carbon capture tech allows fossil fuel companies to continue polluting,” Greenpeace UK wrote on X. “That money could insulate millions of homes and build thousands of wind turbines. These are the real solutions to stop emissions and bring bills down.”

Carbon capture will have a role to play in decarbonising energy, wrote Hannah Daly, professor of sustainable energy at University College Cork, Ireland, on X, “but a small one relative to more fundamental energy transitions – renewables, electrification and cutting energy waste. CCS (carbon capture and storage) won’t make homes warmer or bring bills down, make the air cleaner, or make energy secure.”

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