Starmer set to announce £22bn boost for UK carbon capture

The UK is set to invest almost £22bn over 25 years in carbon capture and storage schemes, Sir Keir Starmer is to announce ahead of the upcoming international investment summit.

Projects in Teesside and Merseyside will benefit from the £21.7bn in funding over 25 years, which the government says will attract £8bn in private investment and contribute toward the UK reaching net zero by 2050.

Ministers say they have reached commercial agreement with industry. Plans are projected to make the UK a leader in the growing sectors, to create 4,000 jobs in the north of England and support up to 50,000 jobs in the wider economy.

The clusters – or carbon capture, utilisation and storage (CCUS) – work by capturing CO2 emissions before they reach the atmosphere and storing them below the seabed.

And the CCUS hydrogen projects are poised to help remove some 8.5m tonnes of carbon emissions per year, which is equivalent to taking around four million cars off the roads.

The UK has enough capacity to store 200 years’ worth of emissions. 

Following permitting decisions, the sites will aim to start capturing emissions from 2028 with a capacity of over 8.5m tonnes annually, and up to 78bn tonnes under the North Sea overall.

It comes the same week the UK closed its last coal power station after 142 years – and ten days ahead of the government’s major summit aimed at attracting international investors.

The Prime Minister, Chancellor Rachel Reeves, and energy secretary Ed Miliband will announce the projects on a visit in the north west today.

“We’re reigniting our industrial heartlands by investing in the industry of the future,” Sir Keir said. “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 to help deliver jobs, kickstart growth, and repair this country once and for all.”

“By securing this investment, we pave the way for securing the clean energy revolution that will rebuild Britain’s industrial heartlands,” Miliband added.

“This funding is a testament to the power of an active government working in partnership with businesses to deliver good jobs for our communities.”

And Reeves said the “game-changing technology” would bring jobs and investment into communities, “ignite growth in industrial heartlands and power up the rest of the country”. 

“Working in partnership with business is at the heart of our plan to deliver strong growth and investment, so we can rebuild Britain and make everyone better off”. 

The announcement, which follows recommendations by the independent Climate Change Committee (CCC), also paves the way for the first UK large-scale hydrogen production plant.

The government has also approved a £4bn project to build an industrial-scale CCUS facility in the north-east, known as the Net Zero Teesside project, led by BP and Equinor.

It is set to start by the end of this year with operations expected to begin in 2027 and could generate up to 860 megawatts of low-carbon electricity, enough to power up to 1.3m homes.

Tees Valley mayor Ben Houchen welcomed it as a “monumental day”, while Chris Musgrave, Teesworks industrial zone chairman, said it is “fantastic news” that could boost the region.

James Richardson, acting CCC chief executive, said the wider funding news was “fantastic” and “reassuring”, and added: “We can’t hit the country’s targets without CCUS.

“It will no doubt provide comfort to investors and business about the direction of travel for the country.”

While Emma Pinchbeck, Energy UK’s chief executive, said: “CCUS is a tool in our armoury.

“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.”

Clare Jackson, Hydrogen UK CEO, said: “This initiative is a crucial step forward for regional development, driving economic growth, and creating high-quality jobs across the country.

“CCUS-enabled hydrogen not only provides a low-carbon, and scalable energy solution but also ensures the UK remains at the forefront of the global hydrogen economy.