CCUSInvestorRoadmapCapturingCarbonandaGlobalOpportunityApril2022CCUSInvestorRoadmapCapturingCarbonandaGlobalOpportunityCarboncaptureandstorageis“anecessity,notanoption”fortheUK’sambitiontotransitiontonetzeroby2050TheUKiswellplacedtoleadinCCUSgloballywith:oAworldwidereputationasaninternationalcentreofengineeringexcellence•Extensiveexperiencefromtheoil,gasandpetrochemicalssector•SubstantialCO2storagepotentialandindustrialinfrastructuree.g.gasnetworkTheUKisafirstmover;wewillsupporttheestablishmentofatleasttwolowcarbonCCUSclustersbythemid-2020sandafurthertwoby2030throughwhichweaimtocapture20-30MtCO2peryear2CCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity■MostactiveanddeepestcapitalmarketsinEurope■Stableregulatorymarket■2ndinG20foreaseofdoingbusiness■0%dividendwithholdingtaxrate,aspartofwidercompetitivetaxregime■TheUK-EUTradeCooperationAgreementpostEUexitallowszerotariffmarketaccesswiththeEU■FurtherUKFreeTradeAgreementsenableexportstotherestoftheworld(currently70plusEU)■Super-Deduction-Anew130%first-yearcapitalallowanceforqualifyingplantandmachineryassetsTheUKhasanestimated78GtCO2storagecapacity,enoughtosupporttheUK’sdemandsfor100sofyearsTheUKhasoneoftheworld’smostattractivebusinessenvironmentsEngineeringemploys6.6bnintheUK£22bncommittedtoraiseR&Dto2.4%ofnationalGDP280,000employedinoilandgasindustries3CCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunityWorldleadingresearchinstitutions-thehighestdensityofworldclassuniversitiesPotential£4.3bninGVAfromUKCCUSexportsby2050£140mtosetuptheIndustrialDecarbonisationHydrogenRevenueSupportschemeOpportunitiesinanadvancedandgrowingsector:■Globalplayer:UKisinthetop5countriesgloballyforCCUSreadiness.TheUKhasoneofthelargestpotentialCO2storagecapacitiesinEurope■Projectpipeline:FundingforindustrialcarboncaptureandhydrogenproductionprojectswillbeannouncedlaterthisyearandallocatedthroughtheClusterSequencingprocessandhydrogenfundingschemes■Regulatoryenvironment:Bespokebusinessmodels■Boostjobs:CCUS-enabledclusterscouldsupportupto50,000jobsintheUKby2030WhyinvestinUKCCUS?4UKaimstocapture20-30MtCO2peryearby2030£1bnTosupportthecapitalcostsofCCUSinfrastructurethroughtheCIF£100mInnewR&DspendingtodevelopDACCSandotherGGRtechnologiesintheUKUpto£170mIndustrialDecarbonisationChallengeFundCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity£8.3bnInpotentialtotalUKcapturedturnoverfromCCUSby20502021IndustrialclustersUKGov.fundingOur2035DeliveryPlanCriticalactivitiesandmilestonesonapathtodevelopingtheUKCCUSsector5202220232024202520302035Track-1ClusterSequencingprocessTrack-1ClusterFEEDTrack-1negotiationswithtransportandstoragecompaniesandemittersTrack-1ClusterconstructionTrack-1CommissioningTrack-2:SecondClusterSequencingdevelopment,launch,negotiationsandconstructionAnnouncementofshortlistedCO2emittersthatwillproceedtonegotiationsAtleastonepowerCCUSplantbymid2020sCapture20-30MtCO2paby2030including6MtCO2fromindustrialCCSDeployatleast5MtCO2paofengineeredgreenhousegasremovals(GGRs)by2030Launch£240mNetZeroHydrogenFund(NZHF)Launch£140mIndustrialDecarbonisation&HydrogenRevenueSupportschemeLaunchPhase-2oftheClusterSequencingprocessPublicationofUKHydrogenStrategyAnnouncewinnersof£70mDACCS&otherGGRsinnovationprogrammePublicationofT&S,ICCandpowerbusinessmodelupdatesDesignofhydrogenbusinessmodelcompleteConfirmationof£1bnCCUSInfrastructureFund(CIF)Deliverafullydecarbonisedpowersystemby2035Atleast2clustersbythemid2020s4CCUSclustersby2030Upto10GWofhydrogenproductionLegallybindingtargetof78%emissionsreductionsby2035Upto1GWofCCUS-enabledHydrogenCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunityGovernmentactivityIndustryactivityJointgovernment&IndustryactivityKeymilestonesGovernmenttargetCCUSiscrucialtodecarbonisationintheUKCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity6TheroleofCCUSintheUK’stransitiontonetzeroWewillensureasecondleaseoflifefortheNorthSeainlow-carbontechnologiesby:Deliveringonour£1bncommitmentto4CCUSclustersby2030,withthefirsttwositesselectedintheNorthEastandNorthWestcurrentlyproceedingthroughTrack-1By2050,emissionsassociatedwithindustrycouldneedtofallbyaround90%comparedto2018.IndustrialCCUSwillbefundamentaltothisTheNorthSeaTransitionAuthority(NSTA)aretheregulatorforthestorageofCO2ontheUKContinentalShelf.Whenitreceivesanapplicationforastoragepermit,theNSTAisrequiredbylawtoensure(amongstotherrequirements)thatthestoragecomplexandsurroundingareahavebeensufficientlycharacterisedandassessedtoensurethereisnosignificantriskofleakage.PowerCCUScanprovidenon-weatherdependent,dispatchablelowcarbongeneration.Thiswillbevitalalongsidesystemflexibilityandenergystoragetosupportafullydecarbonisedelectricitysystemby2035TheNorthSeaTransitionDealwillcommittodeliverinvestmentofupto£14-16bnby2030innewenergytechnologies,ofwhich£2-3bnisallocatedtoCCUS,£2-3bntoelectrificationandupto£10bntohydrogenTheUK’sworldclassskillsandinfrastructurearegearinguptothetransitionTherearestrongtransferablecapabilitiesfromexistingUKindustriesintoCCUS:■Worldwidereputationasaninternationalcentreofengineeringexcellenceandworldleadingintheoil,gas,andpetrochemicalssector■Extensiveexperienceinimplementinglargeoffshoreinfrastructureprojectsandinvestinginsharedoffshoreinfrastructuresolutions■Deepknowledgeofsubsurfacetechnologies,geoscienceandreservoirmanagement■AroundhalfofthebusinessopportunityforUKCCUSisassociatedwithengineering,procurementandconstructionmanagement(EPCm)services,akeystrengthfortheUK7CCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunityEnergy,oil,andgas280,000employedintheoil&gasindustries£27bnoil&gasturnover,c.40%throughexports90%ofoilandgasjobshavehighormediumtransferabilityChemicals153,000employedinthechemicalindustry£19.2bnGrossValueAddedin2018£57.6bnofchemicalsexportsin2019Engineering5.6memployedintheUK£1.2tnoftotalUKturnover,21.4%UKtotal5.1%increaseinemploymentoverlast5yearsGovernmentandindustryworkingtogetherCollaboratingtodeliverCCUSintheUKWhatwearedeliveringWhatwelooktoindustrytodeliverEstablishingalongtermCCUSmarket■Setambitiouscapturetargetstosupportourlongtermambitiontogettonetzeroby2050■SetuptheClusterSequencingprocesstoestablishCCUSdeploymentintheUKtodecarboniseindustrialclusters■LaunchedfundingstreamstosupportCCUSdeployment■Establishtwooperationalindustrialclustersbythemid-2020s■Thesectorwillinvest£2-3bntobuildtheTransport&Storageinfrastructuretohelpcapture20-30MtCO2peryearofcarbonby2030Astable,regulatedmarket■Incentivisingscaleupandpromotingreliabilitythroughdevelopinginvestablebusinessmodelstoprovidelongtermrevenuecertaintyandaddressing‘crosschain’risk,andcreatingaregulatedassetbase■InitialdraftingofCCUSNetworkCode,guidedbygovernmentanddrivenbyindustry,enablingthedevelopmentofnetworkcodesandstandards■SupportthedevelopmentoftheCCUSNetworkCode■SupportthegovernmenttodevelopbusinessmodelsSkillsandcapability■Developingourgreenjobsandskillsofferandreformingtheskillssystemtoensurethedevelopmentofkeycapabilities■Identifyandsupporttherapidgrowthofcompetitivenewcapabilitiestomeetfutureenergyneeds■Createskilled,long-termjobsandadiverseworkforce,demonstratinghowtheywillfillanyskillsgapsSupplychains■Publishedsupplychainroadmapsettingouthowgovernmentandindustrycanworktogethertoharnessthepowerofastrong,industrialisedsupplychain■WorkingthroughtheEnergySupplyChainsTaskforceandCCUSCounciltoidentifyUKsupplychainstrengths■Builduprobusttransparentsupplychains,withemphasisonlocalskillsandcapacitydevelopment■ShareinformationonsupplychaindevelopmentCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity8Sources:SeeAppendixEstablishingalongtermCCUSmarketCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity9WhatwehavedoneWhatwearedoingWhatwecommittedtoEstablishingalongtermCCUSmarket■LaunchedtheClusterSequencingprocess.ConfirmedHyNetandtheEastCoastClusterasTrack-1clusterswithAcornasareservecluster■SelectingtheprojectsthatwillmakeupTrack-1clusters■Workwithindustrytoachievefourlowcarbonindustrialclustersby2030andatleastonenetzeroindustrialclusterby2040■AnnouncedClusterSequencingPhase-2:eligibleprojects(powerCCUS,hydrogenandICC)■EngagingwithindustryonthedevelopmentofaTrack-2process■SupportTrack-1clusterstobeoperationalinthemid-2020sEastCoastClusterHyNetAcornDeployingCCUSintheUKthroughindustrialclustersWhatwehavedoneWhatwearedoingWhatwecommittedtoCCUSInfrastructureFund(CIF)■Announced£1bnCIFtosupportthecapitalcostsofstrategicCCUSinfrastructure■Committedupto£40moftheCIFtosupportdesignworkforoffshorestorageandonshoreinfrastructurethroughIndustrialDecarbonisationChallenge,whichisprovidingupto£171macrossnineprojectsThefinaldesignoftheCIFwilldevelopalongsidetheClusterSequencingprocess,thedesignofthebusinessmodelsandthefinalisationofrelatedfundingstreams£1bnCIFtosupportthecapitalcostsofstrategicCCUSinfrastructure,helpingtocreate‘SuperPlaces’inareassuchastheNorthEast,theHumber,NorthWest,SouthernEngland,ScotlandandWalesIndustrialDecarbonisationandHydrogenRevenueSupport(IDHRS)Setupthe£140mIDHRSschemetofundournewhydrogenandindustrialcarboncapturebusinessmodelsWewillannounceafundingenvelopein2022thatwillenableustoawardthefirstcontractstoCCUS-enabledhydrogenandindustrialcarboncapturefacilitiesfrom2023£140mtoacceleratehydrogenprojectsandindustryadoptionofcarboncaptureandstorageNetZeroHydrogenFund(NZHF)ConsultedonthedesignoftheNZHFandsplitthefundingin4strandsWeareaimingtoopenthefirstfundingwindowforStrands1and2inSpring2022,withapotentialofafurtherfundingwindowin2023/24.Weintendtoopenstrand3insummer2022Upto£240m,deliveredbetween2022-2025,tosupportnewH2productioninUKProvidingcapitalandrevenuefundingtosupportCCUSdeploymentEstablishingalongtermCCUSmarketCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity10WhatwehavedoneWhatwearedoingWhatwecommittedtoPowerCCUS-the“DispatchablePowerAgreement”(DPA)■DevelopedtheDPAwhichbuildsontheUK’sexpertiseinContractsforDifferenceforrenewableenergy.TheDPAaimstoprovidelongtermrevenuecertaintyandastableinvestmentenvironmentfordevelopersofpowerCCUSplants■PublishingDPAfullcontractinSpring2022andconsultingtofurtherunderstandindustryperspectives.Engagingindustrylaterin2022withacallforevidenceforfuturepolicydevelopmentforPowerCCUS.DevelopingDecarbonisationReadiness■Acompetitiveallocationprocessinthe2020sforthenextphaseofPowerCCUSdeployment.SupportatleastonePowerCCUSprojectfordeliverybymid-2020s.Deliverafullydecarbonisedpowersystemby2035TransportandStorage(T&S)-theT&SRegulatoryInvestment(TRI)Model■DevelopedtheTRIbusinessmodelwhichsupportsstableinvestmentbyprovidinginvestorswithaclearsightofthelong-termrevenuemodelforT&S.ThemodelisdesignedtoaccommodatedifferentpotentialnetworkdesignsandgrowthprofilesWorkingtowardsconfirmingaregulatorandestablishingalicensingregime.Developingeconomiclicences,T&Scodesandcodedocumentswithindustry.DevelopingtheTRIModelfurthertomitigateremote,specifiedrisksandrevenuerisk;andestablishareturncommensuratewithrisktakenbyT&SCompanies■Ambitiontodeployatleast5MtCO2peryearfrom‘engineered’GGRsby2030tosupportthetrajectorytoNetZeroHydrogenBusinessModel■Publicationofgovernmentresponseonbusinessmodeldesign,alongsideindicativeHeadsofTermsofthebusinessmodelcontractDevelopingdetailedmodeldesigntoprovideproducerswithrevenuesupportandhelpovercomeoperatingcostgapbetweenhydrogenandfossilfuelsandanROIFinalisethebusinessmodelin2022Announcefundingenvelopein2022tosupportdeliveryofupto1GWofCCUS-enabledhydrogenbymid-2020sUKGovernmentisincentivisingscaleupandpromotingreliabilitythroughdevelopinginvestablebusinessmodelsandcreatingastableregulatorybaseCreatingastableregulatedmarketCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity11UKGovernmentisincentivisingscaleupandpromotingreliabilitythroughdevelopinginvestablebusinessmodelsandcreatingastableregulatorybaseCreatingastableregulatedmarketCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity12WhatwehavedoneWhatwearedoingWhatwecommittedtoIndustrialCarbonCapture(ICC)■TheICCcontractprovidesamodeltounlockinvestmentbyprovidinglong-termrevenuecertaintyforindustrialuserstoachievedeepdecarbonisationandisbeingadaptedtosupportwasteCCUSprojects■PublishingnextbusinessmodelupdateandfullICCcontractinSpring2022andconsultingtofurtherunderstandindustryperspectives■DevelopingbusinessmodelstoenablewasteCCUSprojectstoobtainaccesstofunding■Ambitiontocapture20-30MtCO2,including6MtCO2ofindustrialemissions,peryearby2030and9MtCO2peryearby2035Existinginfrastructure■AnExpressionofInterestforGreenhouseGasRemoval(GGR)projects,includingDACCSandPowerBECCS,closedinearly2022whichwillprovidevisibilityonmarketreadiness■Reportspublishedonmonitoring,reportingandverifyingandcommercialframeworksforpowerBECCS■ResponsetoGGRincentiveframeworkconsultationpublishedaswellasthebiomasspolicystatement■DevelopingfirstofakindPowerBECCSbusinessmodel■Runninga£70minnovationcompetitionforDACCSandotherGGRstobringdowncostsandsupportnewlyemergingefficiencyimprovements■DevelopingrobustsustainabilitycriteriaforBECCStoensuredeliveryofgenuinenegativeemissions■ConsultingonpreferredGGRbusinessmodelsinspring2022■Ambitiontodeployatleast5MtCO2peryearfrom‘engineered’GGRsby2030tosupportthetrajectorytoNetZeroWearecommittedtothedevelopmentofaCCUSsupplychainincludingthroughrealisingexportopportunitiesStrengtheningsupplychainsCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity13WhatwehavedoneWhatwearedoingWhatwecommittedtoStrengtheningandpromotingUKsupplychain■PublishedtheCCUSSupplyChainRoadmaptomaximisetheUK’spotential■LaunchedtheUKEnergySupplyChainTaskforce-ajointenterpriseworkingtomaximiseopportunitiesandmitigatechallengesinthedevelopmentofenergysupplychains■UKExportFinance,theUK’sexportcreditagency,hasenhanceditssupporttoattractinvestmentintoCCUSsupplychainsandexportcapability■WorkingwithindustrytomapthecapabilitiesoftheUKCCUSsupplychaintoidentifyspecificequipment,technologiesandserviceswhereUKcanbecomeagloballeader.EngagingwithkeystakeholderstofacilitatenewopportunitiesoverseasfortheUK'snetzerosupplychains■Developinga‘FitforCCUS’programmetoensureUK-basedcompaniesareinthebestpositiontocompeteforandwinnewCCUScontractsacrosstheglobe.OfferingasuiteofproductstosupporttheinnovationtoexportpathwayforCCUSsupplychains■Workingwithindustrytoharnessthepowerofastrong,industrialisedUKCCUSsupplychain,whilstensuringthattheCCUSsectorremainsinvestible,costeffectiveandfocusedondelivery■UKExportFinanceisincreasingitsInternationalExportFinanceExecutivenetworkfrom15to30CountryHeadstobuildapipelineofopportunitiesforsupplychainsandsecureinvestmentfortheUK■DeployingatargetedUKofferutilisingthefullsuiteofGovernmentfinanceandsupporttosecurea‘firstmover’exportadvantageExistinginfrastructure■IdentifiedexistinginfrastructurethatcouldbetransitionedtosupportCCUSdeployment,e.g.oilandgastransportation■Workingwithstakeholderstounderstandtherequirementsneededtotransitionandrepurposeexistinginfrastructureandcapabilitieswhereappropriate■ProtectingexistinglegacyinfrastructureandutilisingthetransferablecapabilitiesdevelopedinrelatedsectorsoverthepastfivedecadesDevelopingkeycapabilitiesandsupportingthestrongtransferableskillstheUKalreadyhasBuildingourskillsandresearchandinnovationCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity14WhatwehavedoneWhatwearedoingWhatwecommittedtoSkills■LaunchedGreenJobsTaskforce,whichpublishedanindependentreportwithrecommendationsthatinformedtheNetZeroStrategy■ReformingtheskillssystemthroughLocalSkillsImprovementPlans.WeareworkingwithindustrytosupportthedeploymentofCCUSthatcouldhelpcreate50,000UKjobsby2030■GreenJobsDeliveryGroupwillbeacentralforumthroughwhichgovernment,industryandotherkeystakeholderssupportthedevelopmentanddeliveryofgreenjobsandskills■TheNorthSeaTransitionDealhasacommitmenttodeliveranintegratedPeopleandSkillsPlantoensurethehighlytransferableworkforceisbeingtappedintothroughouttheenergytransition.Researchandinnovation■Between2004-2019weprovidedover£330mpublicfundingforCCUSResearchandInnovation■TheIndustrialDecarbonisationChallengeFundprovidesupto£170m,matchedby£261mfromindustry,supportslow-carbontechnologydevelopment■EstablishedtheIndustrialDecarbonisationResearchandInnovationCentre■Inadditiontothe£70mDACCSandGGRcompetition,weareprovidingupto£25mofresearchanddevelopmentfundingtohelpdevelopandpilotnextgenerationcarboncapturetechnologiesintheUK■GGRtechnologiesandNextGenerationCarbonCapturearetwoofthetoptenprioritiesofthe£1bnNetZeroInnovationPortfolioAppendix:SourcesCCUSInvestorRoadmap:CapturingCarbonandaGlobalOpportunity15TheUK’sworldclasstransferableskillsandinfrastructureBEIS(2019)EnergyInnovationNeedsAssessment–CarbonCapture,UsageandStorage.Tonote,GVAconsidersmarketvalueestimates.UKOilandGasAuthority(2020).UKCSintegration.EngineeringUK(2019)KeyFacts&FiguresUKGovernment(2020)UKEnergyinBrief2020H2FCSUPERGEN(2020)OpportunitiesForHydrogenAndFuelCellTechnologiesToContributeToCleanGrowthInTheUKStatista(2020)ChemicalIndustryintheUKOilandGasUK(2021)WorkforceInsightReportTheUK-Areliable,stableplaceforbusiness,leadingtheworldforcapitalinvestmentsOilandGasAuthority(2021)CarbonCaptureandStorage.BEIS(2019)EnergyInnovationNeedsAssessment–CarbonCapture,UsageandStorage.Tonote,GVAconsidersmarketvalueestimates.CCUSiscrucialtodecarbonisationintheUKandWhyinvestinUKCCUSBEIS(2022)BritishenergysecuritystrategyIndustrialClustersMissionInfographic(2019)BEIS(2018)CCUSdeploymentpathwayactionplan.GCCSI(2018)TheCarbonCaptureandStorageReadinessIndexOilandGasAuthority(2021)CarbonCaptureandStorage.Additionalinformation:ClusterSequencingPhase-2:eligibleprojects(powerCCUS,hydrogenandICC)BusinessmodelsDepartmentforInternationalTradeTheUK’sDepartmentforInternationalTrade(DIT)hasoverallresponsibilityforpromotingUKtradeacrosstheworldandattractingforeigninvestmenttooureconomy.Weareaspecialisedgovernmentbodywithresponsibilityfornegotiatinginternationaltradepolicy,supportingbusiness,aswellasdeliveringanoutward-lookingtradediplomacystrategy.DisclaimerThisinformationhasbeenpreparedbytheDepartmentforInternationalTrade(DIT),andsuppliersofDIT,forgeneralinformationalpurposesonly.Thisinformationisnotintendedtoamounttoadviceonwhichyoushouldrely.AlthoughDITanditssuppliersmakesreasonableeffortstoensuretheaccuracyofanyinformationprovided,neitherDITnoranyofitssuppliersmakesanyrepresentations,warrantiesorguarantees,whetherexpressorimplied,thatanyinformationsuppliedisaccurate,completeorup-to-date.Accordingly,youmustobtainprofessionalorspecialistadvicebeforetaking,orrefrainingfrom,anyactiononthebasisofthisinformation.NeitherDITnoranyofitssuppliersacceptsanyresponsibilityforupdatingthisinformationinlightofsubsequenteventsorforanyotherreason.ThisinformationdoesnotconstitutearecommendationorendorsementbyDIToranyofitssuppliers.Tothefullestextentpermittedbylaw,neitherDITnoranyofitssuppliersacceptsorassumesanyresponsibilityorliabilitytoanyreaderofthisinformationforanylossordamage,whetherincontract,tort(includingnegligence),breachofstatutoryduty,orotherwise,evenifforeseeable,arisingunderorinconnectionwiththeuseoforrelianceonthisinformationincluding,butnotlimitedto,lossofprofits,sales,business,orrevenue,businessinterruption,lossofbusinessopportunity,goodwillorreputation,oranyindirectorconsequentiallossordamage.Shouldanysuchreaderchoosetorelyonthisinformation,thentheydosoattheirownrisk.DITistheowner,orthelicensee,ofallintellectualpropertyrightsinthisinformationandDITreservesallrightsinthisinformation.great.gov.ukPublishedApril2022