The UK's regulatory framework for Carbon Capture, Usage, and Storage (CCUS) is primarily governed by the Energy Act 2008 and subsequent regulations. This framework focuses on ensuring the safe and efficient development and operation of CCS infrastructure, including transport and storage networks. Learn more..

HISTORY

Montreal Protocol - 1987

The Montreal Protocol, signed on September 1987, is an international treaty aimed at protecting the ozone layer by phasing out the production of substances responsible for ozone depletion. While the Montreal Protocol does not directly regulate CO₂ emissions or Carbon Capture and Storage (CCS), it has delivered significant climate co‑benefits by reducing emissions of highly potent greenhouse gases. CCS has developed under climate‑specific frameworks such as the UNFCCC and the Paris Agreement, but both initiatives contribute to broader global climate mitigation efforts.

More up to date global drivers

The primary global drivers for Carbon Capture and Storage (CCS) are the need to mitigate climate change, the rising demand for energy and essential materials in developing economies and government policy support that incentivize investment in low-carbon technologies. CCS plays a crucial role in reducing GHG emissions in essential industries like steel, cement, and chemicals, while also supporting economic growth and job creation.

Establishing a UK CCUS market to unlock economic opportunities

Since 2021, the UK has established the roll-out process and identified the first four CCUS clusters for deployment in the UK by 2030 (recent government assessments acknowledge that initial deployment is likely to scale up progressively through the late 2020s and early 2030s). The government has committed up to £20 billion to establishing a CCUS sector in the UK, which will help unlock economic opportunities and will include significant investment in projects supporting up to 50,000 jobs. Tapping into our 78 billion tonnes storage potential in the North Sea and assets can help us to maximize the economic opportunity from the transition to net zero and help create a commercial and competitive market.

In March 2023, the Chancellor announced up to £20 billion to support the initial deployment of CCUS. The goal is to create four CCUS clusters by 2030, storing 20 to 30 megatonnes of CO₂ a year, delivering up to 50,000 jobs and helping level up the UK and eventually achieving a self-sustaining market by 2035, according to GOV.UK. Also announced was the first eight projects of the ‘first-of-a-kind capture networks’ in North East England, North West England and North Wales, with plans to expand Track-1 clusters and establish Track-2 clusters in North East Scotland and the Humber.

This timeline is driven by the UK's commitment to net-zero emissions by 2050, with CCUS playing a crucial role in decarbonizing various sectors, including power generation, industry, and hydrogen production. 

Key milestones and timelines

• 2021: The UK government announced the selected first two clusters (East Coast and HyNet).
• 2023: The UK government announced the next steps for CCUS Clusters.
• 2024: The HyNet cluster project moved into construction.
• Mid-2030s: The East Coast Cluster aims to capture and store CO₂.
• 2050: The UK aims for net-zero emissions.

Transitioning to net zero

Transitioning to net-zero emissions with Carbon Capture and Storage (CCS) requires significant investments and policy changes, but it's a crucial step towards reducing gas emissions. CCS can play a vital role in decarbonizing industries and potentially even removing CO₂ from the atmosphere. Governments and industry need to work together to create the necessary infrastructure, regulations, and incentives for CCS to be deployed effectively and at scale.

The UK’s independent advisor on climate change, the Climate Change Committee (CCC), has said that CCUS is a ‘necessity, not an option’ for the transition to net zero. Furthermore, the International Energy Authority (IEA) has said that CCUS is an essential component of a global transition to net zero, with an estimated 1 billion tonnes of storage capacity being required globally by 2030 for a net zero pathway consistent with 1.5 degrees. In the future net zero world, we will still need materials such as cement, steel, and chemicals. For many of these sectors, CCUS is the only viable route to decarbonize at the scale required for us to meet our targets. CCUS is key in creating new sustainable energy for the future. By using CCUS, we can generate more low carbon power and create a responsive clean energy system. CCUS can be used to decarbonize the production process for hydrogen and other low carbon fuels.

CHALLENGES

London Protocol

The 1996 London Protocol was amended in 2009 to allow for the export of Carbon Dioxide (CO₂) streams for sequestration in sub-seabed geological formations. While the amendment itself is still awaiting ratification by all parties, the IMO.org adopted a resolution in 2019 (LP.5(14)) allowing for the provisional application of the amendment. This means that countries can begin implementing the amendment, even before it officially comes into effect. The 2009 amendment allows CO₂ streams to be exported for storage in another country, provided that an agreement or arrangement is in place between the relevant countries. 

• 1996 London Protocol - This protocol builds upon the 1972 London Convention and aims to prevent marine pollution from dumping and incineration of wastes at sea. 

• 2009 Amendment - This amendment specifically allows for the export of CO₂ streams for permanent storage in sub-seabed geological formations, according to the Global CCS Institute. 

• 2019 Provisional Application - A resolution (LP.5(14)) was adopted allowing countries to begin applying the 2009 amendment provisions, even before it officially enters into force. 

• Purpose of the Amendment - The amendment aims to facilitate the development of carbon capture and storage (CCS) technologies and the potential for transboundary storage of CO₂. 

• Conditions for CO₂ Export - The 2009 amendment outlines specific conditions for the export of CO₂, including the need for agreements between countries and strict monitoring and safety measures. 

• Current Status - The 2009 amendment is still pending ratification, but countries can now apply it provisionally, allowing for the development of CCS projects that involve transboundary CO₂ storage. 

Why is cross border transfer of CO₂ important?

• Cost-Effectiveness - Storage Availability / Optimized Infrastructure - Not all regions have suitable geological formations for long-term CO₂ storage. Cross-border transfer allows for utilizing storage locations in other countries, potentially reducing costs and improving project viability. Cross-border pipelines and other transport infrastructure can be shared, leading to economies of scale and lower costs for all involved. A new report by the CCSA indicates that enabling cross-border CO₂ transport and storage could reduce overall costs by up to 20% for industrial emitters in the EU, EEA countries, and the UK. 

• Enhanced Emission Reduction - Broader Decarbonization/ Industrial Flexibility / Resilience - By enabling CCS in regions where it might not be possible otherwise, cross-border CO₂ transfer facilitates wider adoption and reduces overall emissions. Cross-border transport gives industrial emitters more flexibility in choosing storage sites and transport routes, allowing them to find the most efficient solutions. Cross-border networks can enhance the resilience of CO₂ storage by providing backup storage locations in case of issues at a primary site.

• International Cooperation and Collaboration - Shared Resources / Political & Social Challenges - Cross-border cooperation allows countries to share resources and expertise, fostering innovation and faster progress towards climate goals. Public acceptance of CCS can be influenced by local concerns. Cross-border cooperation can help address these concerns by ensuring that storage is conducted in a responsible and transparent manner. The European Union's Industrial Carbon Management Strategy emphasizes the importance of cooperation across borders for CO₂ transport and storage. 

Examples of cross-border CO₂ transfer

• Northern Lights project - This project, based in Norway, facilitates the transport of CO₂ from various European countries to Norway's offshore storage sites, as first-of-their-kind liquid CO₂ carriers transport CO₂ from industrial plants to storage sites. 

• North Sea as a storage hub - Many cross-border projects in Europe are focused on connecting CO₂ emitters in countries like France, Belgium, the Netherlands, and Germany to the North Sea, which has significant offshore storage potential. 

• Asia-Pacific - Shipping is being identified as a key role in enabling cross-border CCUS in Asia-Pacific, with the potential for large-scale shipping of CO₂. 

Challenges and considerations

Regulatory frameworks - Developing domestic and international regulations for CO₂ transport and storage is crucial, including carbon accounting, verification, and permitting procedures. 

Liability and risk - Establishing clear jurisdictional authority and allocating commercial and operational liabilities for CO₂ leaks during transport is essential.

Public acceptance - Ensuring public support for CCUS projects, including cross-border CO₂ transport, is important for their successful implementation.

International agreements - Countries involved in cross-border CO₂ transport often need to enter into bilateral agreements to address legal and regulatory issues. 

CO₂ as waste - The characterization of CO₂ as a waste product under certain regulations can create additional complexities for cross-border transport. 

What is meant by the term ‘CO₂ value chain’?

Captured CO₂ can be used in a number of industrial applications. This makes it a tradable commodity with its own market value. And like other tradable goods, CO₂ is also part of a bigger value chain — a cycle that includes new infrastructure to make a record of the captured gas, as well as bespoke transport and storage solutions.

How does it work?

Deploying carbon dioxide capture solutions to prevent industrial CO₂ emissions reaching the atmosphere is only part of the story. To utilize this CO₂, the gas must first be transported from the capture site to the end user, either by a pipeline network (like those used in industrial clusters), or by ship. Moving it by ship first requires the carbon dioxide to be transformed into liquefied CO₂ (LCO₂). This then has to be piped to an LCO₂ carrier and loaded ready for transport. Once the ship arrives at its destination, the LCO₂ is turned back into a gas and stored or used in various industrial applications

What examples are there of the CO₂ value chain in action?

Carbon dioxide capture technologies are still at a relatively early stage. Most current projects harness emissions from large-scale power plants and industrial clusters, then transport the CO₂ to secure geological storage sites deep below ground or beneath the seabed. However, the beginnings of a value chain are also emerging. One example is a joint feasibility study by Mitsubishi Heavy Industries (MHI) Group and three other companies in Japan for a large-scale CCUS value chain project using ship transportation to help decarbonize hard-to-abate industries.

What role could the value chain play in a net zero society?

Carbon dioxide capture technologies can extract more than 90% of CO₂ emissions from fossil fuel-fired power plants and industrial processes. Integrating capture systems with pipeline networks and storage sites, as well as using digital connections to track and facilitate end-to-end transactions, can support both CCUS technology and broader decarbonization efforts.

Which industries can this help to decarbonize?

Captured CO₂ is currently used by a number of industries, including for enhanced oil recovery (EOR), producing synthetic fuels, making construction materials like cement and aggregates, as well as in the manufacture of fertilizer, plastics and chemicals. The business case for CCUS is still developing. However, increasingly rigid climate targets and the advent of carbon pricing schemes like the EU and UK Emissions Trading Systems which put a per-tonne cost on CO₂ emissions could make the potential to trade captured CO₂ a valuable solution for heavy emitters to consider.

Business case models - What is required?

Business case models for Carbon Capture and Storage (CCS) can be structured around either the emissions cleanup side (CO₂ capture) or the CO2 storage/utilization side, or a combination of both. Several approaches, including offtake contracts, carbon contracts for difference, and targeted project funding, can be used to create a strong business case for CCS. 

Emissions Cleanup (CO₂ Capture) Models

Model A (Emissions Reduction) - Focuses on reducing emissions from a specific facility or source by implementing CCS technology.

Model B (Zero Emissions) - Aims for zero or very low emissions from a plant by utilizing CCS to capture all or almost all CO₂ emissions.

Model C (CO₂ Utilization) - Emphasizes capturing CO₂ and utilizing it for other purposes, such as enhanced oil recovery (EOR) or in the creation of new products. 

CO2 Storage/Utilization Models

Model 1 (Geological Storage) - Involves capturing CO₂ and permanently storing it in underground geological formations. 

Model 2 (CO₂ Utilization) - Captures CO₂ and uses it as a feedstock for various industrial processes or to create new products. 

Model 3 (Combination) - Combines geological storage with CO₂ utilization, ensuring a portion of the captured CO₂ is stored while another portion is used. 

Key Considerations for Developing CCS Business Cases

Cost - CCS technology can be expensive, so understanding the costs of capture, transport, storage, and utilization is crucial. 

Benefits - The benefits of CCS, such as reduced emissions, potential revenue from CO₂ utilization, and the potential for new jobs, need to be clearly articulated. 

Policy and Regulatory Environment - Favorable policy and regulatory environments that de-risk investments and facilitate project development are essential. 

Long-Term Contracts - Long-term contracts with emitters, CO₂ aggregators, or storage operators can provide stability and certainty for investors. 

Targeted Funding - Government funding or subsidies can be crucial for making CCS projects financially viable, especially in the early stages of development. 

Risk Assessment - A thorough assessment of the risks associated with CCS projects, including technical, financial, and regulatory risks, is necessary. 

Examples of implementation

In both the UK and Europe, Carbon Capture and Storage (CCS) is being implemented through cluster-based approaches, where CO₂ capture, transport, and storage are managed in specific industrial regions. The UK is focused on geographically concentrating projects around industrial hubs, while Europe emphasizes regional synergies and scalability, according to the Clean Air Task Force.

UK implementation - Cluster based approach 

• The UK's CCS strategy focuses on developing "clusters" around existing industrial centers like Merseyside, Teesside, and Humberside.
• Track 1 and Track 2 Clusters - The program has two phases: Track 1, focusing on the initial clusters with a strong focus on major emitters, and Track 2, which will include more streamlined processes based on Track 1's learnings.
• Transportation and Storage (T&S) Regulatory Investment (TRI) Model - The UK government uses this model to support the transportation and storage infrastructure that connects the CO₂ capture facilities to the storage sites.
• Example -The Zero Carbon Humber project in the UK uses a saline aquifer named Endurance in the southern North Sea for CO₂ storage, according to National Grid.