Guidance

Cluster sequencing for CCUS deployment: Phase-1 - clarification questions and responses

Updated 1 November 2021

Overview

This document will act as a public record of clarification questions (CQs) which have been submitted to BEIS in relation to the CCUS cluster sequencing process, as well as BEIS’s responses to these questions. Our intention in publishing these clarifications is to ensure full transparency throughout the process, and that any and all prospective participants in the process can have equal access to information.

Please note that CQs may not always appear here in exactly the same format as they were submitted to BEIS, and that where necessary BEIS may make amendments to a given CQ in order to ensure the protection of confidential and/or commercial sensitive information.

Updated 2 July 2021

Clarification questions and responses

Is a cluster consisting of 2 capture projects and a CO2 Transport and Storage (T&S) solution eligible to participate in Phase-1? (CQ001)

As per the eligibility criteria set out in Section 2.2 of the Phase-1 guidance document, a cluster must meet our definition of a CCUS cluster in order to be considered eligible for Phase-1. This definition requires the presence of a T&S network and an associated first phase of at least 2 CO2 capture projects. These 2 capture projects can consist of any combination of capture applications (for example, power, industrial, hydrogen, or engineered GGRs).

Any cluster which satisfies this definition, as well as the remaining eligibility criteria, would be eligible to participate in Phase-1.

If a cluster is deemed not to be eligible, will its constituent projects be able to submit an application to connect to a different cluster’s T&S network in Phase-2? (CQ002)

Yes, in principle. Phase-2 will be open to any prospective emitter projects which can feasibly connect to the T&S network of a cluster sequenced onto Track-1, regardless of whether they originally appeared on that cluster’s Phase-1 submission (or indeed the Phase-1 submission of another cluster). This is true regardless of whether the emitter project in question would connect directly to the T&S network via a pipeline, or via other means such as CO2 shipping.

All emitter projects regardless of their status in Phase-1 will be required to demonstrate their satisfaction of any relevant eligibility criteria in order to participate in Phase-2. BEIS has published indicative eligibility criteria for the respective Phase-2 allocation processes throughout Section 4 of the cluster sequencing guidance document, and these will be confirmed at the Phase-2 launch in August.

If there are multiple entities responsible for different components of the T&S network, who should act as cluster lead? Could this decision affect BEIS’s assessment of the cluster’s organisational capacity and capability? (CQ003)

As set out in Section 2.1 of the cluster sequencing guidance document, we have specified that the Cluster Lead must be the organisation primarily responsible for the T&S network. We recognise that in certain cases, multiple entities may be responsible for different components of the T&S network (for example the onshore and offshore components). In such cases, the cluster should seek to nominate the organisation which they judge to be best-placed to coordinate its submission as Cluster Lead – this organisation must nevertheless be responsible for some component of the T&S network.

When assessing a cluster’s organisational capacity and capability, BEIS will take account of all capacity and capability which we deem that the cluster can feasibly make use of. This assessment will not be limited to the capacity and capability of the Cluster Lead alone.

Our understanding is that in order to be considered eligible for Phase-1, the cluster plan must include T&S and at least 2 emitters, all scheduled to be operational by 2030 – please could BEIS confirm this? (CQ004)

This understanding is correct. In Section 2.2 of the cluster sequencing guidance document, we state that in order to be considered eligible for Phase-1 a cluster submission must both meet the definition of a CCUS cluster, and be operational by 2030. In combination, these should be taken as meaning that in order to be eligible, the projects necessary to constitute a CCUS cluster (meaning a full-chain T&S network and a minimum of 2 associated capture projects) must all be scheduled to commence operations by 2030.

It is also important to note that this is distinct from the definition of commercial operation date (COD) which is used in assessing against the deliverability criterion. In assessing against the deliverability criterion, we define the COD as the date of the first continuous injection of CO2 into the T&S network, which may be from a single emitter source.

Please could BEIS clarify whether or not an emitter which is included in a Phase-1 cluster plan must also make a Phase-2 submission in order to be able to be selected to participate in negotiations in relation to that cluster? (CQ005)

As set out in Section 4 of the cluster sequencing guidance document, all emitter projects seeking to access support from the government’s CCUS programme at this time must submit an application in Phase-2 of the sequencing process. This is true regardless of whether that emitter has appeared on a Phase-1 cluster plan. We would however note that due to the precise parameters of the cluster sequencing process, it may be the case that some projects featured on a Phase-1 cluster plan would not have the opportunity to participate in Phase-2 this year.

Firstly, whilst in Phase-1 we will consider any emitter projects which can credibly be scheduled to begin operations prior to 2030 as part of the core cluster plan, the individual Phase-2 allocation processes have set a cut-off date of December 2027. For this reason it may be that certain emitter projects may be eligible for evaluation in Phase-1, but not eligible to participate in Phase-2.

Secondly, there are certain CCUS sectors (BECCS and DACCS) which can be considered as part of the Phase-1 cluster plans, but for which we have not confirmed that we will be in a position to execute a Phase-2 allocation process this summer. This is set out in further detail in Section 4.6 of the guidance document.

BEIS will provide further information on future project allocation processes in due course. On BECCS specifically this will follow the publication of the government’s bioenergy strategy position paper later this year. On DACCS, government will publish its response to the GGRs call for evidence later this year.

Please clarify how you would like us to structure our working arrangements to facilitate the anti-competitive behaviour requirements set out on page 13 of the Cluster Sequencing guidance document. (CQ006)

Section 2.1 (page 13) of the cluster sequencing guidance document flags that the preparation of submissions may require Cluster Leads to collate confidential information from a range of prospective capture projects, which are not affiliated with one another and which may compete with each other for funding at Phase-2 and/or in other markets. Further, Phase-2 of the selection process is open to prospective capture projects who may not have previously developed a relationship with the Cluster Lead.

To minimise the risk of anti-competitive behaviour, or the perception of anti-competitive behaviour in this process, we have proposed measures (page 13) to give confidence that a potential emitter may be passed to a Cluster Lead without fear of their information being shared with another prospective capture project or indeed with the particular individuals within that Cluster Lead organisation who are responsible for making Phase-2 applications. These measures include ensuring that individuals responsible for collecting information relating to prospective capture projects are not involved in the preparation of any Phase-2 applications. It is for organisations to determine how they structure themselves to deliver this.

We believe that the timescale from the launch of the cluster sequencing process to the submission date of 9 July is extremely tight, and would ask for an extension to this timeline. (CQ007)

As set out in Section 1.5 of the cluster sequencing guidance document, we have allowed a 9-week window for clusters to prepare their submissions. We do not anticipate any extension to this window.

The majority of respondents to our consultation on the cluster sequencing process earlier this year felt that the proposed 10-week submission window would be demanding but manageable to adhere to, as reflected in Section 2.11 our response to the consultation, published last week.

We recognise that the eventual decision to move to a 9-week window may put additional pressure on clusters’ resources; however, we do not anticipate that the change of a week should make a material difference to the ability of clusters to make a robust submission aligned to their core concept. We would also emphasise that we have attempted to maximise the extent to which the cluster plan can refer to separate supporting documentation, rather than reproducing information, with the aim of lessening the burden on clusters associated with preparing their submissions.

Please could BEIS clarify how the cluster’s Commercial Operation Date will be defined? Would multiple emitters need to be online in order for BEIS to judge that the COD had been reached? (CQ008)

As set out in Section 3.3 of the cluster sequencing guidance document, for the purposes of the evaluation we define the cluster’s COD as the date of the first continuous injection of CO2 from an emitter project into the T&S network. This injection can be from either a single emitter or multiple emitters concurrently.

This is distinct from the definition used in the initial eligibility assessment, which is described in more detail in our response to CQ004.

The cluster plan template is very rigid and the expectation of detail from across the cluster projects is extremely high. Is there an acceptance by BEIS that information submitted across the cluster will be at different stages of definition and how will this affect the scoring? (CQ009)

The level of detail requested in the cluster plan is reflective of the emphasis that we have placed on the provision of clear and credible evidence throughout the assessment process. However, BEIS recognises that different projects may not always be able to provide the same level of detail in this evidence, depending on where they are in their respective development processes.

When assessing a given project’s maturity and credibility, BEIS will make a rounded judgment on the basis of all information provided. The level of information which can be expected given that project’s level of development will also be taken into account.

Is it possible to provide a cluster plan that defines options for cluster development up to 2030? (CQ010)

As set out in Section 2.1 of the cluster sequencing guidance document (and throughout), clusters are asked to make a single submission to BEIS aligned to their project core concept. Clusters should not make any attempt to present options for their development over and above that core concept.

How would government make the decision in Phase-2 to alter the cluster plan by adding or substituting an emitter project? If BEIS were to make the decision in Phase-2 to alter the cluster plan, how might this affect BEIS’s assessment of the cluster’s deliverability and/or affordability? (CQ011)

Throughout Section 4 of the cluster sequencing guidance document, we have given an early indication of the factors that may be considered in determining the outcome of each of the individual Phase-2 allocation processes. However, clusters should note that these should be treated as indicative only at this stage; further guidance will be published at the Phase-2 launch in August.

BEIS would only make the decision to alter a cluster plan in Phase-2 if we were comfortable that doing so would improve the cluster proposition and deliver better value for money to government. We have committed to working closely with the Cluster Lead organisation to understand the impact of any potential alteration to the cluster plan, and would not make any change which would undermine the deliverability or affordability of the cluster as a whole.

BEIS has stated that their expectation is that not all early clusters will need to draw on the Carbon Capture and Storage Infrastructure Fund (CIF). How will this decision be made? (CQ012)

BEIS is not currently in a position to comment on the precise decision-making process for allocating the CIF. Interested parties should refer in the first instance to the CIF update published on 7 May, which sets out government’s latest position on the role of the CIF. Government recognises that the level of CIF funding required to enable CCUS deployment may vary between clusters, and between projects within those clusters. This varying level of requirement will be taken into account when decisions on the allocation of the CIF are made.

Final decisions on the award of funding from the CIF will not be made until Phase-2, and any awards will be subject to a range of factors, including demonstration of value for money and compliance with subsidy control rules.

Please clarify the facilities that can be contained within a T&S company, for example pumping and compression for connected emitter projects and/or import facilities? Would these sit within the T&S or Emitter project? (CQ013)

The T&S Business Model update states that “the T&S network user will be responsible for ensuring the CO2 entering the transportation system meets the required quality specification” (footnote Page 8). How emitters achieve this will be dependent on the emitter specifics and the T&S specification.

The launch documents do not specify how to configure the design or responsibility for pumping or compression; this is for the cluster to decide.

Is there a common risk assessment matrix that could be used in order to help create a more consistent view of risks across clusters? (CQ014)

There is no common risk assessment matrix to use. The Cluster Lead is to provide evidence of their risk management approach and a cluster-wide risk register in the format that is being used by the cluster.

The intent is to understand the approach to cluster wide risk management and where there are differing approaches within the cluster, how these are being integrated.

Referring to the cluster plan submission template, questions 4.5.1 and 4.5.2 – there are requirements to describe systems and process etc for HSE management and what reporting to board is undertaken. Is this intended to be for the T&S Cluster Lead Board or for all entities progressing projects in the cluster? (CQ015)

The intent is to understand the Health, Safety and Environmental management approach across the cluster including all entities.

In response to these questions, clusters should look to evidence how the wider cluster HSE management is being delivered and monitored and how the Cluster Lead is coordinating the cluster-wide HSE systems, processes and governance, in addition to any HSE management undertaken at the project level.

Would BEIS increase the word limits in the cluster plan if necessary to allow clusters to provide more detail on their submissions? (CQ016)

The cluster plan has been designed to allow clusters to cross-refer to their supporting information wherever possible, rather than reproducing this information in the form. The word limits within the cluster plan have been set with this in mind. BEIS does not intend to make any alterations to these word limits at this time.

Please clarify whether CO2 shipping can be included within the Phase 1 cluster plan and how this would be assessed and scored by BEIS. (CQ017)

In particular:

Can an emitter be included in the Phase 1 cluster plan if its transport of CO2 to the T&S network via port facilities will be in whole or in part by ship, as long as the emitter is in the UK?

Where the emitter and shipping are wholly within the UK then the emitter can be included within the Phase 1 cluster plan. Noting the definition of the T&S network (footnote 8, page 14 of cluster sequencing guidance document), and the references to shipping in the sections “Potential for future abatement beyond 2030” (page 22) and “Learning and Innovation” (page 27).

If so, should the T&S submission include the physical transport infrastructure at the emitter site and the T&S lead site?

The costs and emissions associated with road, rail or shipping transportation are to be included within the onshore and offshore elements of the cluster plan and LCOA submissions. Work is ongoing to develop how non-pipeline transportation will be treated within the Transport and Storage business models.

Similarly, must there be a committed ship transporter?

Shipping transportation will be evaluated using the same approach as for all other elements of the cluster submission.

What degree of commitment is expected in the MoU or Letter of Intent between the Cluster Lead and its emitter project? (CQ018)

Throughout the cluster sequencing Phase-1 guidance document, and specifically in Sections 2.1 and 3.3, we have stated that an MoU is the minimum level of commitment which is expected between the Cluster Lead and its emitter projects. We have not given any further specification of the level of commitment which is expected.

However, clusters should note that the degree of commitment between an emitter project and the Cluster Lead may be taken into account by BEIS in assessing the credibility and maturity of that emitter proposal.

Will it be possible for the cluster submission to include a glossary of terms as a piece of supporting documentation? If so, would this be subject to any word limits? (CQ019)

Yes, this would be a sensible approach. If including a glossary of terms as a piece of supporting evidence, the cluster should ensure that the scope of this document is limited to the definition of terms, and does not include any further narrative information in relation to the submission.

Content within referenced materials will not count towards the word limit; however, if BEIS considers that a cluster has used referenced materials to continue an answer this content will not count towards the assessment.

If a particular piece of supporting information is referenced in different sections of the cluster plan, should it be uploaded multiple times within the application portal? (CQ020)

Each individual piece of supporting evidence should be uploaded only once, in the section of the portal corresponding to the first point where it is referenced.

What sources of government capital support will be available to clusters? (CQ021)

Clusters sequenced onto Track-1 will have the opportunity to negotiate for capital support from the £1 billion CCS Infrastructure Fund (CIF), which will support the deployment of T&S networks and industrial capture projects. In addition, the £240 million Net Zero Hydrogen Fund (NZHF) will be launched early in 2022 and will support the deployment of CCS-enabled steam methane reforming projects, as well as electrolytic hydrogen production.

Final decisions on the award of funding from these sources will not be made in Phase-1, and any awards will be subject to a range of factors, including demonstration of value for money and compliance with subsidy control rules.

Please could BEIS provide additional clarity on the treatment of international shipping and CO2 imports in the cluster sequencing process? Would it render the cluster plan ineligible? If not, will BEIS evaluate it positively or negatively? (CQ022)

Clusters should provide supporting evidence regarding any internationally shipped CO2 as part of their submission, including costs , jobs if included in the economic benefits template (Annex B) and emission volumes. This will enable BEIS to consider international shipping in its assessment of the cluster under the economic benefits and learning and innovation criteria, as well as the qualitative future abatement potential sub-criterion. International shipping proposals will be assessed as per the guidance we have set out in relation to these criteria.

However, cost and abatement data in relation to international shipping will not be factored into the cluster-wide LCOA calculation or quantitative abatement volumes to 2030, and therefore should not be included in Annex C.

For the sake of clarity, emitter projects which are not located in the UK will not in and of themselves be eligible to access UK government funding in Phase-2.

It appears from the guidance that DACCS projects will not be eligible to submit an application in Phase-2. If a DACCS project is included in Phase 1 on the basis that no government support is required for this project to become fully operational, will this be considered favourably by BEIS as part of the cluster submission? (CQ023)

Our Phase-1 assessment process has been designed in a way that allows us to value DACCS projects as part of the cluster plan, alongside other CCUS technologies, and specifically to value the potential negative emissions offered by DACCS projects. However, we have not confirmed that there will be a Phase-2 allocation process for DACCS projects, as at this stage there is not a support package in place which could facilitate this.

When assessing against the cost criterion for the purpose of cluster sequencing, BEIS will only consider the overall costs associated with a given project, not the level of government support required by that project. Therefore, no project can be credited at this stage for being able to proceed without public funding.

Does BEIS accept that the Phase-1 evaluation criteria may favour larger clusters? (CQ024)

Taken in aggregate, the Phase-1 evaluation criteria set out in Section 3.3 of the cluster sequencing guidance document are reflective of the balance of government’s objectives. Whilst we recognise the concern raised here, we would flag several other components of the evaluation criteria which may also be pertinent to this concern.

Firstly, the quantitative emissions reduction metric is cumulative, such that a cluster whose emitter projects come online earlier in the decade will benefit from more months and years of cumulative emissions abatement. This may in some cases offset the benefit accrued by larger clusters.

Secondly, this quantitative metric will be offset against other criteria in the evaluation process. For example, it may be the case that a smaller cluster may be less complex and carry less operational risk, which would be reflected in its performance against the Deliverability criterion. In addition, where a smaller cluster has the potential to scale up its abatement levels in the future, this can be captured in the qualitative assessment of the cluster’s potential for future abatement beyond 2030.

In reference to the requirement for ‘appropriate Board level sign-off’: is it sufficient for cluster organisations to demonstrate the appropriate internal authorisation level, recognising that this may not be the Board? (CQ025)

Yes. BEIS’s intention here is that the cluster demonstrate that the appropriate level of internal approval for the project has been obtained. We recognise that this level may vary between organisations, depending for example on the size and internal governance structure of the organisation.

Where a cluster partner will leverage resource from its parent company, how should this be reflected in the provision of corporate information? (CQ026)

We are not prescriptive as to the precise level of detail which should be provided in relation to parent companies. However, where a given entity (such as a parent company) is heavily featured in the cluster submission, the cluster should provide corporate information in relation to that entity and its relationship with the Cluster Lead, to the extent that this is likely to be helpful to BEIS in assessing the cluster’s deliverability overall.

Is it correct to assume that in scoring against the Deliverability criterion, BEIS will take into account information from throughout the cluster plan? (CQ027)

Yes. When assessing against the Deliverability criterion, BEIS will draw on information throughout the cluster plan and supporting documentation. This principle will apply throughout the assessment process, as stated in Section 3.1 of the cluster sequencing guidance document.

In relation to question 5.1 in Annex A; can BEIS expand on their requirement for both a Level 1 and Level 2 project schedule? (CQ028)

We request an integrated level 1 plan to show the key milestones and high level activities across the cluster. We also request a native file schedule at the greatest level of detail currently available. The cluster plan requests a schedule with at least level 2 detail and we do not define what we mean by that but request it is fully logic linked, shows critical path and float and ideally is costed and resourced.

Is it the case that the ‘CO2 volumes to 2030’ sub-criterion will include volumes up to and including 2029, but excluding volumes in 2030? (CQ029)

Yes. This sub-criterion will consider volumes captured up to 31 December 2029.

In explaining the supporting narrative around hydrogen projects and offtake arrangements, should the cluster submission reference planned hydrogen infrastructure and provide information about delivery partners? (CQ030)

We can confirm that this approach is acceptable in principle; where a cluster can demonstrate the presence of a credible plan for its hydrogen infrastructure and information about delivery partners, this will be taken into account when assessing the overall credibility of its hydrogen production proposals.

In assessing the reliability of project cost and phasing estimates, as well as determining the credibility factor for a given emitter project, how will BEIS take into account the varying maturity of capture plant studies? (CQ031)

BEIS recognises that the cluster submissions will include both capture plant and T&S projects at varying stages of maturity.

In relation to stored volumes, a credibility factor will be defined for all emitters included in Annex C and applied to the plant operating hours assumption for individual emitters. The factors that will be considered in defining this factor are the emitter specific sub-set of those factors described in the guidance document section 3.3 for the assessment of stored volumes to 2030.

In relation to costs, contingencies will be assessed in the light of the maturity of the studies, including the remaining risks, omissions and uncertainty. They will be adjusted if it is felt that the contingency does not reflect these factors. Refer to AACE Recommended Practice 40R-08 for acceptable methods of defining contingency. Costs themselves will not be subject to a credibility factor in the LCOA model, but adjustment of contingency will be used where credibility is believed to be low. Similarly, the accuracy class for the cost items should align with the status and evidence of the development of that item.

In relation to operational factors such as availability and emissions from the capture plants and T&S a review will be performed and adjustments made if the work performed to date is immature and these do not reflect industry benchmarks.

If a capture project intends to become operational before 2030 but no specific studies have been completed in relation to that project, can it be included in the quantitative assessment of quantitative capture volumes to 2030? (CQ032)

In principle all projects online before 2030 will be considered in the scoring for stored volumes before 2030. However, emitter projects which are judged to have a credibility factor of less than 50% will be removed. Credibility will be assessed as described in the cluster plan and guidance document, which does not require every FEED stage study to be complete in order to be assessed as having a credibility of greater than 50%. The credibility factor for volumes also includes financial credibility, credibility of off-takers and any other factor that BEIS considers to materially impact the credibility of an individual emitter or emitter profile.

In the event that an emitter project shipping CO2 from a remote site is included in the Phase-1 submission, should capture costs in relation to that ‘external’ emitter be included in Annex C? (CQ033)

For clusters which include domestic shipping import from UK Emitter projects, the relevant Emitter project needs to be identified and the necessary detail provided in a relevant Emitter type tab (for example, PP / ICP / HCP / NEP). For potential international shipping import, these should be excluded from the LCOA calculation entirely, as per our previous response to CQ022.

Should the full-life costs reported in Annex C include those costs relating to expansion phase emitter projects? If so, how will these be treated, recognising that these may be at a lower level of maturity? (CQ034)

We can confirm that the LCOA model should include all expansion phases. We will consider credibility factors for all emitters based upon the guidance set out in the launch document, assessor judgement and information that has been provided in the submission. Emitter projects with credibility factors assessed as being below 50% will be excluded from the LCOA calculation entirely (that is removal of all Emitter CAPEX/ OPEX/ CO2). Emitter projects with credibility factors between 50% and 100% will result in corresponding reduction of Load Factor, OPEX and CO2 (with CAPEX remaining unchanged); this is the case regardless of whether the project in question will become operational before or after 2030.

Is it possible for emitter projects to submit clarification questions directly to BEIS, rather than via the Cluster Lead? (CQ035)

Our position remains that all engagement, coordination, and submission of information should be through the Cluster Lead. This means that all clarification questions should be submitted through the Lead to the cluster sequencing address. We’ve set out in the consultation and reemphasised in the launch document that we are looking for an integrated and coordinated proposal. Of course, if you cannot answer a specific question from a particular emitter then you can submit this question to us.

To what extent is the Cluster Lead responsible for verifying information provided by emitter projects, especially in relation to Annex B and Annex C? (CQ036)

The NDA requires that information submitted: ‘has been verified as being true, accurate and not misleading by the organisation or, in the case of information provided by third parties and collated by the organisation, which the organisation confirms has been verified as being true, accurate and not misleading by the relevant third party’.

BEIS and advisers will be performing an assessment on the credibility of emitters, in line with the description set out in relation to the application of the credibility factor; this includes considerations including maturity, technical viability, financial viability, credibility of offtake. Clusters are under no specific obligation to check these things – but it could impact scoring (under a range of different criteria, for example, emissions, cost and deliverability) if it transpires during the assessment that an emitter project included on the cluster plan is not credible.

So, whilst there is no legal obligation to perform a specific level of assurance, clusters may feel, particularly given that we have emphasised that credible, consistent submissions is something that we value throughout the launch doc and cluster plan, that there is an incentive to consider whether you can have confidence in a particular project before including it on the plan.

Rather than uploading every piece of supporting evidence to the submission portal, would it be possible for the Cluster Lead to provide a list of documents which BEIS can call on as and when required? (CQ037)

Our position is that the cluster lead should submit all referenced information to BEIS on or before Friday 9 July. No new information can be provided to BEIS after the submission deadline (though we do have, as the launch document states, a process for asking supplementary questions on what you have submitted). We appreciate that there is a lot of information that needs to be provided and we appreciate that this will require significant effort. However, we think it is important for fairness and to enable BEIS and advisers to make sufficient progress through the assessment window for this information to all be provided on 9 July.

On what basis will BEIS adjust the COD provided in the submission? If BEIS opt to adjust the COD, will the evidence behind this decision be shared with the Cluster Lead? (CQ038)

COD adjustments will be based on confidence in the schedule to the COD, and will look at factors including but not limited to; logic structure, progress to date, the duration of scheduled activities being within reason, alignment with and credibility of supporting evidence, resultion of any clashes and overlaps with ther projects, and critical planning and consenting processes being accounted for. Similarly, Section 3.3 of the guidance document sets out the evidence that will be credited in the deliverability criterion. We will not be sharing information relating specifically to the adjustment of the COD during the assessment window; however, clusters will have an opportunity to discuss the scoring process more generally with BEIS following the announcement of the Phase-1 result later this year.

Can BEIS provide additional guidance on the interaction between the 2030 cut-off date for primary emitters in Phase-1 on the one hand, and the requirement that emitter projects be operational by 2027 in order to be eligible for Phase-2? (CQ039)

The distinction here is the difference between Phase-1 and Phase-2; they are 2 different, though connected, parts of the overall cluster sequencing process.

The process launched on 7 May is Phase-1 (Provisional cluster sequencing). For an emitter to be included as a primary emitter in Phase-1 there must be an MOU in place between the Lead and the emitter and the emitter must, credibly, be able to be operational by 2030. Whether the emitter is primary will determine both:

• whether it can count to the definition of a cluster
• whether it can count to the quantitative emissions criteria

An emitter that is operational by 2028/9 can count towards these metrics and be included on the plan.

Distinct from this is Phase-2 (final project selection) which will be launched in August. To be eligible to participate in the project selection process an emitter must plan to be operational by 2027. An emitter planning to be operational in 2028/9 would not be eligible for the Phase-2 process and would instead be expected to participate in subsequent allocation rounds.

Where a single organisation is present across multiple projects, is it sufficient to provide the corporate information requested in Section 3 of Annex A once, rather than duplicating for each project? (CQ040)

Yes. Corporate information in relation to any single entity need only be provided once.

In some sections of Annex A (such as section 4.1), it is unclear whether the information provided should relate only to the T&S operator, or to the emitter projects as well. (CQ041)

To take the given example of section 4.1, clusters should look to provide information across all partner organisations as far as possible. Our intention through this section is to gather the information necessary to make an overall assessment of the cluster’s work in structuring its governance and contracting processes to successfully deliver on its objectives. We anticipate that there may be a focus on the Cluster Lead here as the coordinating entity, however information across all cluster partners is likely to be relevant.

Should the response to Section 4.6 of Annex A relate only to work done by the Cluster Lead in relation to the T&S infrastructure? (CQ042)

Our intention in this section of the assessment is to make an overall assessment of the cluster’s work (both undertaken and planned) in relation to supply chain engagement and planning. There may be some level of focus on the Cluster Lead here as the coordinating entity, however information across all cluster partners is likely to be relevant.

In relation to section 5 of Annex A, it is our intention that the description of schedule uncertainty and key risks will be provided in detail for the T&Sco, and more simplistically at the emitter level. Please confirm whether this is acceptable. (CQ043)

The cluster plan template acknowledges that different projects may be at varying levels of development, and accordingly we have requested that emitter project schedules should be provided at the greatest level of detail which can be supported by the evidence provided.

Can additional boxes be inserted into the cluster plan template to reflect the number of emitters within the cluster? (CQ044)

Yes, as described in Section 3.5.5 of the cluster plan, if additional rows are needed for Primary Emitters please insert them into the Table. Please describe the emitters becoming operational after 2030 within Section 3.6.1 ‘Expansion of emitters’.

Should supporting documentation that is referenced in different sections of the cluster plan be uploaded more than once? (CQ045)

No, duplicates of supporting documentation should not be included within the cluster submission. To ensure the documents are considered within the right sections make sure they are clearly named and marked against the relevant sections within the referencing matrix (Annex D).

Please confirm the interaction between supporting documents and the word count; for example, is the capability statement a supporting document? (CQ046)

Supporting documents do not count towards the word count, however, any attempt to continue answers within supporting documents will be removed. For the specific example of the capability statement, this is expected to be provided within the word count in Annex A; however, the capability statement can include references to supporting documentation, which will not itself be subject to word limits.

Regarding the requirements around anti-competitive behaviour (p.13 of the guidance document), what does BEIS mean by ‘appropriate arrangements’? (CQ047)

The cluster should put in place arrangements in line with the guidance in Section 2.1 of the cluster sequencing guidance document and note that BEIS does not intend to review each cluster’s specific arrangements. The cluster will need to satisfy itself that it has put in place sufficient mechanisms. See the response to CQ006 for further details.

Can BEIS confirm that the information provided by clusters will not end up in the public domain via a Freedom of Information request? (CQ048)

As described in Section 2.1 of the guidance document, the Secretary of State is subject to statutory obligations, including under the Freedom of Information Act 2000 (FOIA) and so we cannot confirm that the information provided will not end up in the public domain.

Should a full risk register be provided to BEIS, or just the top 10 to 20 risks? (CQ049)

As described in Section 4.2 of Annex A, BEIS wants to understand the cluster-wide risk management approach and see a concise description of the major risks alongside an explanation of any differences of approach within separate cluster projects and how they will be brought together. Alongside this description we would like to see a cluster-wide cross chain risk register, T&S risk register and emitter project risk registers referenced as supporting evidence.

In relation to Health, Safety and Environmental (HSE) systems, processes and governance there could be 2 interpretations for what is expected by BEIS: a) The Cluster Lead has a plan for engaging with the corporate entities involved in the cluster to evidence effective HSE management; or b) All HSE corporate governance for the cluster, including emitter projects, is coordinated and reported to the Cluster Lead. Which approach is BEIS expecting? (CQ050)

Our intention in this section of the assessment is to understand your intended approach to HSE management across the cluster. The guidance document states that we want to see adherence to safety regulations and the identification and mitigation of residual risks to as low as reasonably possible across all components of the cluster. We are not being prescriptive as to the exact approach that should be taken here, and would like each cluster to demonstrate how they think HSE corporate governance is carried out effectively. In Section 4.5.1 and 4.5.2 of Annex A we request the specific HSE indicators that will be monitored at board level.

Could BEIS bring forward the case for blending of hydrogen into the National Transmission System and Local Transmission System, and how can this uncertainty be incorporated into responses? Can 2 options be provided within the response? (CQ051)

As stated in Section 4.5 of the Phase-1 guidance document, any change to blend up to 20% of hydrogen into the existing gas network would have to be safe, with the safety evidence being presented to HSE for assessment before any change could be made to the regulations (earliest 2023). This will also be accompanied by a completed BEIS value for money case, followed by necessary legal and regulatory change meaning the earliest timing for decision would be Q4 2023. Therefore, we suggest all projects follow this guidance when planning their project timelines and for this to be reflected in their cluster application.

To answer your question specifically, you should present only one option using these timelines for your project planning assumptions, and reference where you feel it is necessary in the text.

Each of the projects will have their own execution plan at different stages of development and will be able to show different levels of integration into the cluster-wide execution plan. Does this fit with BEIS’ expectations? (CQ052)

We understand that projects are at different stages of development and expect that some elements will be less defined than others. We want to see the structure the cluster will adopt along with key risks and uncertainties and their potential impacts.

How should governance of the cluster be structured? For example, are BEIS looking for an overarching organisational set-up that includes senior representation from each of the projects for example? (CQ053)

We are not prescriptive on this point, but rather want to understand how you think it best to manage and deliver the cluster. We will review any proposals on this point and assess their credibility, in accordance with the principles set out throughout the guidance document.

Why are BEIS looking for novel construction/ installation techniques? Are these seen as a benefit or a risk by BEIS? (CQ054)

Novel construction and installation techniques could be either, and both, a risk or opportunity and should be identified as such. Whilst the Deliverability criterion looks at the operational date and its credibility it should be noted that the Learning and Innovation criterion seeks to understand potential innovation, knowledge sharing, and future cost reduction potential.

What level of maturity are BEIS expecting in relation to operational philosophy? (CQ055)

We understanding that the development of operation plans will be at an early stage and might change as the clusters develop. The maturity should be consistent with the status of the overall development. We will also be looking to understand how this will be refined as the project development progresses.

Some parts of the submission are geared towards combined emitter-capture projects, how do the customers for a capture company provide information for a ‘capture as a service’ model? (CQ056)

Within Annex A please include emitter information for each emitter and the capture project entity.

For Annex C, where a common/shared CCP which is treating combined flue gas streams from multiple emitters, and where the CCP is independent from those emitters (it includes dedicated independent supply of heat and power to the CCP) such that there is no impact upon the production output of the relevant emitter processes, then the ICP tab may be completed with following approach:

• set product ‘units’/h = Total CO2 Input to Common CCP (kgCO2/h), please provide supporting excel calculation showing derivation from individual emitter streams through to 2050
• specific fuel consumption per unit production output (MWh-fuel/unit, GCV basis) = Total Fuel Consumption for CCP, including associated CHP/Aux Boiler/onsite generation/auxiliary plant (MWh-fuel, GCV basis) / Total CO2 Input to Common CCP kgCO2
• grid import electricity (MW) = CCP Total Grid Import Electricity (MW) at rated Capture Rate
• CO2 Emissions per Unit for Reference Plant (kgCO2/Unit) = set to 1
• specific fuel consumption per unit production output for Reference Plant (MWh-fuel/unit, GCV basis) = set to zero
• specific grid import electricity per unit production output for Reference Plant (MWh/unit) = set to zero

What flexibility can be added to the Annex C model? Can international shipping and optional phases of projects that could come on stream before 2030 be included? (CQ057)

International shipping should be excluded, as per our response to CQ022. Optional phases are not allowed. The cluster should include all emitters which are deemed credible within the LCOA model, including any expansion phases. Assessors will review the credibility of emitters and make adjustment to credibility factor where deemed necessary.

Will BEIS consider an extension to the window for the submission of clarification questions (CQs)? (CQ058)

We can confirm that we will extend the deadline for the submission of CQs from Wednesday 23 June to Friday 25 June.

Will BEIS make available recordings and/or transcripts of the individual submission engagement sessions? (CQ059)

We will not be able to share any recordings or transcripts with clusters following the individual submission engagement sessions. This is firstly because answers given in the course of the sessions are to be treated as indicative only – the published clarifications should be used if a cluster wishes to rely on a particular response – and secondly because of the potential for the creation of an unfair asymmetry of information where, assuming clusters would not be willing to have the recording of their engagement session shared with others, different clusters have access to different information.

Some of the projects included under the cluster plans are still in discussions with regulatory bodies in relation to some aspects of their projects arrangements, such as the use of proprietary solvents, or the blending of hydrogen into the gas grid. How may these discussions this be reflected in the cluster plan submission? (CQ060)

The clusters should demonstrate that projects included in their plans will comply with the current consenting regime and the interpretation by the regulatory bodies and relevant authorities of the consenting requirements (Annex A, 4.5.2). If any of the projects presented under the cluster plans do not meet the current regulations then this should be made transparent under the cluster plan and presented as a risk along with a mitigation plan outlining how compliance is expected to be attained.

The mitigation plan should describe and quantify the impact on the deliverability of their core concept (Annex A, 4.2). Clusters should also include an estimate of the impact of these consenting risks on:

• project schedule (Annex A, 5.1)
• cost, including contingencies (Annex A, 8 and 4.3)
• emissions reduction (Annex A, 6.1 and 6.2)
• planning and consents (Annex A, 5.2)
• the cluster execution plan (Annex A, 4.1)

The presentation of the risks should also outline what happens if compliance is not achieved. If sufficient detail in respect of such risks and their impact is not included within a cluster’s submission, this may affect BEIS’ view of a cluster’s credibility and could impact a cluster’s score against the evaluation criteria.

Given that clusters have been asked to make a single submission to BEIS, which is aligned with their project core concept, how should clusters present the impact of risks on their core concept, for instance risks concerning interfaces with non-CCUS projects? (CQ061)

Clusters should include in their submission any risks that could significantly affect the deliverability of their core concept (Annex A, 4.2) and the current status of engagement with the key stakeholders relevant to these risks (Annex A, 4.4). In addition, clusters should include an estimate of the impact of these risks on:

• project schedule (Annex A, 5.1)
• cost, including contingencies (Annex A, 8 and 4.3)
• emissions reduction (Annex A, 6.1 and 6.2)
• planning and consents (Annex A, 5.2)
• the storage system and expansion phases (Annex A, 3.2 and 3.6)
• the cluster execution plan (Annex A, 4.1)

If sufficient detail in respect of such risks and their impact is not included within a cluster’s submission, this may affect BEIS’ view of a cluster’s credibility and could impact a cluster’s score against the evaluation criteria.

In relation to the guidance set out on anti-competitive behaviour on p.13 of the Phase-1 guidance document; please can BEIS clarify whether Primary Emitters appearing on the same cluster submission are able to discuss and collaborate in preparing that submission? (CQ062)

The guidelines on anti-competitive behaviour set out in the guidance document have been included to ensure that during Phase-1, where a Cluster Lead is collating information from a number of prospective capture projects the information is passed up to the Cluster Lead only and not shared by the Cluster Lead with another prospective capture project. The provisions have not been designed to restrict voluntary information flow between prospective capture projects themselves. However, the Competition Act 1998 prohibits anti-competitive behaviour such as collusion and we note that the prospective capture projects may compete with each other for funding at Phase-2 and/or in other markets and therefore must consider their obligations under relevant competition law at all times.

Should figures, tables, maps and graphs be embedded in the responses in Annex A, or attached separately as supporting documentation? If the latter, would they count toward the word limits in Annex A? (CQ063)

Clusters should use their judgment as to where a particular piece of supporting information should sit. For example, it may be that a small graph or table can be neatly embedded into the relevant field in Annex A, whereas a larger item might sit better as a separate attachment. Any documents attached as supporting information will not standardly count toward word limits, unless they have clearly been used as a continuation of the cluster’s written response.

Does BEIS consider a board letter to be a sufficient demonstration of commitment between cluster partner organisations, including between emitter projects and the Cluster Lead? (CQ064)

Our position is that the content of any agreement between an emitter project and the Cluster Lead is more important than its form. Throughout the cluster sequencing guidance document we have stated that an MoU is the minimum acceptable level of commitment between an emitter and the Cluster Lead; therefore, if a board letter is used, it should aim to provide at a minimum the same level of detail and commitment as would usually be expected from an MoU.

Can BEIS clarify the purpose of Section 3.1.2 of Annex A (organisational structure)? (CQ065)

We are wanting to understand how the Cluster Lead is structured and see that the proposals included within the cluster plan have had sufficient oversight from relevant levels of authority within the Cluster Lead organisation (for example, board approval). Please see our response to CQ025 for further details.

Do Sections 4.5 and 4.6 apply to all cluster partners, or just the T&Sco? (CQ066)

Our intention in these specific sections is to gather information in relation to the cluster as a whole. As a general rule, all sections of the cluster submission should relate to the entire cluster unless otherwise stated - however, it is for the Cluster Lead to determine how to prioritise and/or focus the cluster’s submission.

Can BEIS clarify the purpose of Section 4.7 of Annex A (financial and commercial)? (CQ067)

Financial and commercial (section 4.7) consists of 2 parts. Business plan and financial health (section 4.7.1) aims to understand the financial and commercial health of all the companies involved within the cluster and associated projects and understand how CCUS aligns with companies’ strategic objectives. Financing plan – Project level (section 4.7.2) aims to understand the credibility and maturity of financing plants for each project within the cluster.

If a cluster’s cost estimate breakdown structure differs from that set out in the LCOA, how should the cluster respond? Can the cluster provide its own supporting cost report? (CQ068)

All information in relation to project costs should be provided into the LCOA format with any evidence provided to support the numbers used. An additional cost report could be provided in supporting evidence to explain the translation from a project specific cost breakdown structure into the LCOA model headings. This will only be used to check/clarify figures in the LCOA, and would not be used directly within the assessment.

Should all supporting evidence be uploaded via the online submission portal? (CQ069)

Yes. The online portal contains fields to upload supporting evidence in relation to each section of the assessment. Each piece of supporting evidence should be uploaded only once, in the field of the portal corresponding to the section of the assessment against which it first appears.

How will BEIS support CCUS deployment in clusters not sequenced onto Track-1? (CQ070)

In Phase-1 of the cluster sequencing process, our current focus is on delivering the initial Track-1 clusters. However, in the Phase-1 guidance document, we have committed to bringing forward a further update on a future allocation process for ‘Track-2’, alongside the Track-1 announcement later this year. This update will provide additional details on a future deployment pathway for CCUS beyond the Track-1 clusters.

Can BEIS clarify the factors which will be considered under the Deliverability criterion? (CQ071)

As set out in Section 3.3 of the cluster sequencing Phase-1 guidance document, the primary measurable under the Deliverability criterion will be the corrected Commercial Operation Date (COD). Within this, we will focus on 2 key strands: our confidence in the ability of the cluster to reach commercial operation in the mid-2020s, and the cluster’s ability to deploy at pace within that window. In assessing against this criteria, BEIS will consider a wide range of evidence in relation to the cluster’s deliverability and project plan; a more substantial list of the evidence we will consider can be found in Section 3.3 of the guidance document, as above.

Can BEIS guarantee anchor emitter projects access to the T&S network in Phase-2, or could they be displaced or de-prioritised? (CQ072)

As explained in Section 4 of the cluster sequencing Phase-1 guidance document, the Phase-2 process will be open, such that all capture projects which could feasibly connect to the T&S network of a Track-1 cluster will have the opportunity to submit an application. Therefore, we cannot guarantee that any given project on the Phase-1 cluster plan will be selected through Phase-2.

However, it is important to emphasise that BEIS would only make the decision to alter the Phase-1 cluster plan by adding or removing an emitter project if we judge that doing so would improve the cluster proposal as a whole. In addition, we would work with the T&Sco of the cluster in question to understand any potential on timelines, costs and other relevant factors before making any decision. This principle is also explained in our response to CQ011.

BEIS’s guidance on anti-competitive behaviour appears to refer only to information flows from emitters to the Cluster Lead (and not vice versa). Is this the case? (CQ073)

In Phase-1, the Cluster Lead will be taking on a coordinating role for information submission and enter into an NDA with BEIS. Therefore, the arrangements described in the cluster sequencing launch guidance document will be put in place by the Cluster Lead to ensure that information relating to a prospective capture project is only passed ‘up’ to a Cluster Lead. The guidance relates to information flowing from clusters to emitters insofar as it states that information about one prospective capture project cannot be shared with another prospective capture project. Any arrangements that a Cluster Lead will need to enter in respect of their own information flowing to prospective capture projects is a matter for the individual cluster.

It appears that BEIS’s guidance on anti-competitive behaviour would preclude any individual who works on the Cluster Lead’s Phase-1 submission from then working on a Phase-2 emitter submission. Is this the case? (CQ074)

As stated in the cluster sequencing launch guidance document, Cluster Leads must ensure that any individuals responsible for collecting information relating to prospective capture projects are not involved in the preparation of any Phase-2 applications. Each Cluster Lead must put in place appropriate arrangements to comply with the guidance on anti-competitive behaviour but BEIS has not been prescriptive about the details of these arrangements. The reasoning behind this requirement is set out in full on pg 13 of the cluster sequencing launch guidance document and the reasons include that the preparation of submissions may require Cluster Leads to collate confidential information from a range of prospective capture projects, which are not affiliated with one another and may compete with each other for funding at Phase-2 and/or in other markets.

When responding in relation to the Economic Benefits criterion, the cluster will have to make various assumptions. What is BEIS’s view on the limitations of these assumptions? (CQ075)

BEIS recognises that it may be the case that not all information in relation to the precise nature of the cluster’s economic benefits is known at this stage. In responding to the relevant sections of Annex A and Annex B, the cluster should provide as much relevant detail as possible, along with rationale and evidence for any assumptions which they have made in doing so.

How should clusters go about breaking down their jobs data when completing Annex B? (CQ076)

Within the ‘Jobs’ tab of Annex B, there are tables which will automatically calculate the total number of direct and indirect jobs created and safeguarded, based on the information provided in the ‘Data Input’ section of the tab. The cluster should complete the Data Input section according to the breakdown provided in as much detail as possible, and confirm that the automatically generated totals are correct.

For the purposes of Annex B, BEIS has defined ‘direct’ jobs as those which relate to the project developer and its primary contractors, and ‘indirect’ jobs as those which relate to second-tier contractors and below, capturing the rest of the supply chain. Further guidance on this distinction can be found in the ‘Definitions’ tab of Annex B. As a general rule, the cluster should aim to capture within Annex B any jobs that will be needed in order for the cluster to be realised as described within the submission.

Section 4.7.1 of Annex A requires the cluster to provide details of any financial obligations to government. Please can BEIS clarify the scope of this request? (CQ077)

The purpose of this request is to identify any financial support previously provided by government to entities within the cluster, which have created a financial obligation to government (such as loans). As such, Section 4.7.1 should not be taken as encompassing any liabilities not related to prior financial support, such as ongoing tax liabilities.

Please can BEIS clarify the role of the ‘Reference Plant’ within Annex C? Specifically, should the costs provided in Annex C reflect the full CAPEX and OPEX costs of a given project, or its incremental costs in comparison to the relevant Reference Plant? (CQ078)

The purpose of the Reference Plant mentioned in Annex C is for determination of net CO2 abatement (compared to Reference Plant), and determination of Additional Fuel Costs or Additional Grid Import Costs (compared to Reference Plant) where applicable. The pre-defined (locked cell) Reference Plant parameters shall be maintained as shown in the LCOA model. The undefined (unlocked cell) Reference Plant parameters shall be proposed by the cluster and subjected to BEIS review (for example, for new industrial capture plant). With regard to the emitter project parameters, it is not the intention to direct emitters to adopt preset costs or efficiencies for their emitter projects.

As per the guidance within Annex C it is required for CAPEX and OPEX costs to be provided for Applicable Costs only, where Applicable Costs shall be considered as incremental capital costs which relate to scope of works which contribute towards net CO2 reduction, or additional incremental operational costs which contribute towards net CO2 reduction. For clarification, it is considered that clusters shall review their project costs and determine those costs which are deemed Applicable Costs according to this definition. Clusters should be mindful of whether their full project costs constitute costs applicable to CO2 reduction, or whether only a portion of their project costs are applicable. Clusters should endeavour to make clear any assumptions made and any benchmarks used (if required) to determine their Applicable Costs.

How should clusters show that information provided is authorised by emitter projects? (CQ079)

BEIS wants to see that the cluster is authorised to submit emitter information that is accurate and credible. It is for the cluster to decide how to show the information is credible and this could involve the emitter’s board approval where relevant.

Will BEIS enter into an NDA with the emitter projects? (CQ080)

In Phase-1, BEIS will enter into an NDA with the Cluster Lead organisation only. For information on how this impacts information-sharing with emitter projects, clusters should refer to the guidance on anti-competitive behaviour set out on p.13 of the Phase-1 guidance document, as well as to our previous responses to CQ006, CQ047, CQ062, CQ073 and CQ074.

Is BEIS expecting to see multiple scenarios from the cluster or a single core concept? How will those projects that are deemed more risky be considered within the assessment? (CQ081)

Clusters should submit one, single concept - please see Section 2.1 of the guidance document and our response to CQ010 for further information. The credibility of all emitters will be considered within the assessment and BEIS will also remove any emitters that are clearly not credible and may also correct the operation date of any individual emitter, altering the volume profile accordingly. It is for the Cluster Lead to decide which emitters to include as part of the submission.

Do the expectations on anti-competitive behaviour set out on p.13 of the guidance document apply to all information provided in Phase-1, or only certain aspects? (CQ082)

The expectations regarding anti-competitive behaviour apply to all information related to the Phase-1 submission.

If a cluster is structured according to a ‘capture as a service’ model for its emitters, how should this be reflected in its submission, and specifically in Annex C? (CQ083)

Annex C has been updated to consider capture plants with multiple input streams with the recent update outlining the changes to the model and the expected information. This process is described in more detail in the ‘cover’ tab of Annex C. The assessment of this plant’s credibility will be carried out following the same process for assessing other capture plants with the onus on clusters to provide sufficient evidence to support their claims.

How will companies involved in different projects through different special purpose vehicles (SPV) be considered within the assessment? Can a company involved in multiple SPVs appear in different projects or clusters? (CQ084)

Each SPV would be considered as a distinct commercial entity and therefore would be treated as separate emitters within the assessment. The companies involved in those SPVs could appear within multiple projects or clusters through different SPVs.

How far down the value chain for Hydrogen does BEIS wish to see supporting evidence? (CQ085)

BEIS will look to make a holistic assessment of the credibility of hydrogen proposals, including off-takers. It is for the Cluster Lead to determine what information to submit in order to demonstrate this credibility; BEIS is not prescriptive as to what is expected.

Could you please describe how the proportional scoring method works against the CO2 volumes to 2030 sub-criterion? (CQ086)

As described in the Emissions Reduction criterion section of the guidance document, the project with the highest stored volumes to 2030 will be assigned 10 points with the remaining clusters assigned a score pro-rated to this according to their stored volumes. For example, a cluster with 2 MtCO2 stored to 2030 would score 5, if the best-performing cluster had 4 MtCO2 stored volumes to 2030. These scores will then be multiplied by a credibility factor of between 0.5 and 1, which will defined on the basis of the considerations outlined in Section 3.3 of the Phase-1 guidance document in relation to the Emissions Reduction criterion.

How will different elements of the Economic Benefits criterion be considered? (CQ087)

The assessment of the Economic Benefits criteria will follow the principles laid out within the guidance documentation. The score will consider all of the information provided holistically, and is not separated into distinct sub-criteria.

Some parts of the supply chain will be undefined, such as the company name, on the submission date, how should this information be provided? (CQ088)

BEIS acknowledge that not all information will be available at the time of submission but asks clusters to provide as much relevant information regarding the supply chain whilst explaining any assumptions made within Annex B.

When completing sections of the submission related to stakeholder engagement, should the response focus on the T&S provider or the cluster as a whole? (CQ089)

Unless otherwise specified, all sections of the cluster submission should be taken as referring to the cluster as a whole. However, we recognise that in certain cases the cluster may wish to focus their responses to prioritise more relevant areas, and that this may naturally entail a focus on the T&S provider.

Can the cluster engagement plan be included as a supporting reference document? (CQ090)

Yes, the cluster engagement plan can be provided as supporting evidence but this should not be instead of a focussed answer within the submission form itself. As a general rule, clusters should not replace answers with reference documents.

Is there a requirement for capture projects to provide evidence of board-level sign-off for their own projects, as well as the Cluster Lead? (CQ091)

Yes, clusters should look to provide evidence of the appropriate level of organisational sign-off to support capture project information and documentation within the submission. Please highlight areas that do not have appropriate board-level sign off and explain the reasoning within your responses, including any associated uncertainties.

We note that the quantitative emissions reduction criterion considers stored volumes to 2030, whereas the LCOA metric considers abatement up to 2050. Could BEIS explain this mismatch? (CQ092)

On the one hand, abatement is more sophisticated, however, it depends on a number of factors and can be calculated very differently depending on your assumptions and the maturity of the cluster. On the other hand, the stored volumes metric is simpler and easier to compare across projects and clusters. Our approach therefore seeks to strike a balance between these metrics with abated volumes considered post-2030 and in Annex C, but stored volumes considered before 2030.

How would the inclusion of information in relation to hydrogen infrastructure and off-takers affect BEIS’s assessment of the credibility of the cluster’s hydrogen proposals? (CQ093)

Information related to hydrogen infrastructure and off-takers will form part of the credibility assessment for those emitter projects and the resulting stored volumes. Credibility is considered across the different criteria. Non-exhaustive examples include the deliverability assessment, credibility of CO2 volumes to 2030, potential for future abatement beyond 2030, economic benefits, LCOA credibility factor and cost review.

If the emitters included on the cluster plan have combined capture volumes greater than the projected capacity of the T&S network, how will this be taken into account in the assessment? (CQ094)

The credibility factors assigned to emitters will be applied to the volumes in Annex C to reduce the volumes. This will be performed in 3 stages:

• emitters which are judged to be non-credible will be removed
• credibility of the emitter capture volumes will be assessed
• capacity of the T&S will be further factored into the credibility factor

Finally, as the credibility factor is applied across the full life-cycle of the project, the stored volume profile will be capped at the T&S capacity profile over time by adjusting the volumes of the least credible emitter(s). If the least credible emitter volumes are reduced to zero in this process, or to an annual volume which would be highly inefficient and make execution of the project unviable, then CAPEX/ OPEX will be removed for that emitter or delayed until capacity is available.

Please can BEIS explain the rationale for the difference in the definition of the ‘reference plant’ in Annex C between BECCS and other Power CCUS projects? (CQ095)

Please note that is expected that Power CCUS plants will operate on a dispatchable basis with the objective of displacing running hours of unabated gas power generators on the grid. By comparison, BECCS is expected to operate near base load. Therefore, BEIS has adopted different comparators for each case, as indicated in Annex C.

How should decommissioning costs be accounted for in the cluster submission? (CQ096)

A summary of the decommissioning costs for the cluster should be provided in Section 8 of Annex A including post-cessation of injection OPEX and the split of allocation of re-use assets’ decommissioning expenditure. It would be helpful if this summary is supported by reference reports prepared by the cluster showing the estimation methodology, breakdown, accuracy and contingency.

Can BEIS provide further guidance on the application of AACE Class criteria to Development costs in Annex C, given that not all companies standardly assess against AACE criteria? (CQ097)

Clusters should refer to the expected accuracy range (+/-%) definitions for AACE (indicated in the ’Key’ tab) and indicate the equivalent applicable AACE class for the relevant development cost components.

How does BEIS propose to take account of the value of CO2 removals by negative emissions projects, as opposed to the cost of carbon abatement in other emitter projects? (CQ098)

For the purposes of Phase-1, BEIS are assigning the same value to negative emissions as is assigned to CO2 abatement, as in either case the relevant project is contributing towards a reduction of atmospheric CO2 content compared to the alternative ‘business as usual’ scenario.

How does BEIS propose to take account of the potential for carbon removal projects to generate revenues from selling carbon removal credits in the voluntary market, which could reduce the requirement for support payments over time? (CQ099)

Annex C does not consider potential revenue streams for individual projects, and instead is focused upon the relevant costs associated with each project, and expected Net CO2 abatement which can be expected. However, the wider review of project credibility factor will consider commercial credibility, and the ability of a project to generate revenue streams may support this.

In Annex D, it appears that headings 3.1.4 are missing from the table and 3.1.3 are repeated. (CQ100)

This is correct; items 3.1.4a through 3.1.4e are included in columns P through T, however they are mis-labelled as an additional set of 3.1.3 items. We have uploaded a revised version of Annex D to the Cluster Sequencing page, with this error corrected.

If you have already started completing the current version of Annex D, you can manually change the heading numbers in columns P through T from 3.1.3 to 3.1.4.

How should projects reflect uncertainty and potential for scope, schedule and cost changes in their submission? (CQ101)

We recognise that projects will be at varying stages of development at the time of the sequencing submission and we are looking to understand the status at that point in time. We anticipate that the forward project development plan will detail and describe the work activities that are yet to be completed and which will be done to mature the project technical and cost development to FID.

Potential for scope, schedule and cost changes should be reflected in the Cluster Risk Register. Where concept select has not been finalised, a reference of the current concept matrix should be provided, highlighting the concept submitted in the cluster plan.

Can BEIS confirm how it would prefer compression costs to be submitted for the purposes of the cluster sequencing competition? (CQ102)

CO2 compression costs (Capex and associated impact on Emitter plant performance) for entry of CO2 into the T&S network shall be included within the relevant Emitter tab. Subsequent CO2 compression costs (CAPEX and OPEX) for additional compression stages (as applicable) within T&S network shall be included in the T&S tab.

With regards to Annex C, please confirm if ERF/EFW should be considered as an Industrial Capture Plant or a Negative Emissions Plant. (CQ103)

It is confirmed that ERF/EFW plant should be considered as Industrial Capture Plant, with no account made for biogenic content. For further details, please refer to the ‘cover’ sheet guidance in Annex C - LCOA Model v2.

With regard to Annex C, please can BEIS confirm that the fixed figure used for grid electricity carbon intensity across the life of the project is the intended approach by BEIS. (CQ104)

It is confirmed that the fixed figure for grid carbon intensity over the life of the project is the intended approach. This is deemed a reasonable assumption for the purposes of this evaluation, as carbon reduction associated with future transition of the UK power generation fleet is an independent variable outside the consideration of the current CCUS cluster sequencing process.

Is there an expectation from BEIS regarding how long the Cluster Lead will need to retain data provided by emitter projects for the Phase-1 submission? (CQ105)

The Cluster Lead should put in place arrangements with prospective capture projects to enable the information sharing as required; please refer to Section 2.1 of the guidance document for further information. It is for the Cluster Lead to agree with the prospective capture project the length of time that data is held or maintained is appropriate for the purposes of this process and in line with the guidance set out in the guidance document.

Can BEIS confirm whether it is acceptable for information relating to an emitter project to be submitted by a different legal entity from that which will eventually own the relevant plant? (CQ106)

As stated throughout the Phase-1 guidance document, all information is to be submitted to BEIS via the Cluster Lead organisation. We have not been prescriptive as to how the Cluster Lead should collect this information, or as to which entities would be deemed to be qualified to provide information relating to emitter projects.

However, clusters should be mindful that as part of the assessment of the credibility of a given emitter project, we will consider the ability of that project to demonstrate organisational commitment, as per our response to CQ091. Emitter projects should therefore look to demonstrate the commitment of the entity which will ultimately have decision-making power over the project, regardless of whether that entity is directly contributing to the Phase-1 submission.

The T&S tab in Annex C does not include a specific line item for a floating renewable power generation system. Where should such a facility be included? (CQ107)

Where particular project items do not align neatly with the T&S cost template, the cluster should make use of the additional line items provided marked ‘Other – to agree with BEIS’, in the most appropriate cost table possible.

Can you confirm that an Energy from Waste plant would qualify as an emitter in Phase-1? Is there any level of MWe capacity which could allow the plant to be classified as a PP rather than an ICP? (CQ108)

Energy from waste plants are eligible for inclusion as emitter projects in Phase-1. Such plants should be included under the ICP tab of Annex C, regardless of their power output.

In relation to Section 3.1.4 of Annex A, should responses to these questions also make reference to suppliers to the project, such as engineering contractors? (CQ109)

Section 3.1.4 of Annex A is designed to help evidence the cluster’s organisational capabilities, in support of an overall assessment of credibility and deliverability. Information on key suppliers may be relevant to the extent that it can support the deliverability of the cluster plan; however it is for the Cluster Lead to determine how best to respond.

Can you confirm that an emitter that is located in Northern Ireland can be included in the Phase-1 submission? (CQ110)

As per the eligibility criteria set out in the Phase-1 guidance document, emitter projects located within the UK are eligible to appear in Phase-1 cluster submissions. This includes projects located in each of the devolved nations, including Northern Ireland. The location of a given emitter project within the UK will not affect how it is assessed in Phase-1.

As also set out in the guidance, the proposed terms of any support which may be offered to any cluster following the sequencing process, including the business models, remain subject to further development by the government, in consultation with relevant regulators and the devolved administrations, as well as the development and Parliamentary approval of any necessary legislative amendments. We continue to engage with the devolved administrations to ensure that the proposed policies take account of devolved responsibilities and policies across the UK.

In relation to the minimum capacity requirement for power projects set out in Section 4.4 of the guidance document; is this 100MWe or 100MWth? (CQ111)

In relation to Section 4.4 of the guidance document, we can confirm that power projects must have the capacity to generate and export 100 megawatts of electricity (100MWe) to the electricity grid to be eligible for the Phase-2 assessment process.

Clusters should note that this eligibility criterion will apply specifically in Phase-2, and that we have not specified a minimum output for power plants in Phase-1. However, clusters should consider carefully the implications of including a project in Phase-1 which will not be eligible to participate in Phase-2, as this may impact upon BEIS’s assessment of that project’s credibility.

If a given cluster’s emitter projects have total capture volumes greater than the capacity of its T&S network, how should that cluster prioritise its emitters? (CQ112)

As set out throughout the Phase-1 guidance document, clusters should look to make a submission which reflects their project core concept. It is for the cluster to determine how to structure their submission to best reflect this core concept, as well as how best to meet the assessment criteria set out in Section 3.3 of the guidance document. In relation to our treatment of specific scenario described, whereby the total capture volumes from emitter projects exceed the projected capacity of the T&S network at a given point in time, clusters should refer to our response to CQ094.

Is it possible for clusters to request additional clarification meetings with BEIS at this stage? (CQ113)

In order to ensure fairness in the process, particularly given our current proximity to the submission deadline of 9 July, it will be challenging to offer a similar opportunity to all clusters and provide additional cluster specific guidance; we therefore do not consider engagement at this time to be appropriate.

Is it possible for BEIS to increase the limit on file size for uploads to the online portal? (CQ114)

We can confirm that the file size limit for uploads has been increased to 30MB.

Is it possible to alter the numbering scheme in Annex D? (CQ115)

The numbering format in Annex D can be modified to suit the submission as required. Please consider ease of understanding during the assessment when referencing documents. Specifically, where a reference document may be referred to from multiple cluster plan answers but only included once, the cluster should identify which cluster plan section the document will be uploaded against in the online portal.

In relation to section 6.2 of the cluster plan; can BEIS clarify the scope of ‘uncaptured emissions’? (CQ116)

This refers to any emissions not captured during operation – both at the emitter site (including the capture plan itself), and in the T&S network (for example, operational leakage).

In Annex C, the annual average calculations for factors including capture volumes and plant availability use all years from 2021 to 2050, even where projects do not commence spending until later than 2021, thus skewing the average figures. Will BEIS issue an updated Annex C to account for this, or can projects submit an unprotected version? (CQ117)

Please note that the average figures in column I do not feed into the LCOA calculation and are provided for supporting detail only. BEIS will take note of the issue raised when reviewing the LCOA model submission. As this is a relatively minor issue which will not impact the assessment, we do not intend to issue an updated version. An unprotected version of the model will not be provided either.

In relation to Annex C, and for a new-build emitter project, are the Applicable Costs equivalent to the full projects costs, or only the costs associated with capturing CO2? (CQ118)

Please refer to previous response to CQ078. It is expected that projects will identify those capital costs and operating costs which are deemed applicable costs for their proposed projects. Clusters should endeavour to make clear any assumptions made and any benchmarks used (if required) to determine their applicable costs.

For further clarification, in cases where a project does not consider its full project costs to be applicable costs, the project should also provide a breakdown of the full project costs (full CAPEX and full OPEX) as supporting reference information to enable BEIS to understand the comparison between the indicated applicable costs in the LCOA model and the full project costs, and to support any adjustments as necessary.

In relation to Annex B, projects at pre-FEED stage may not be able to provide information at the level of granularity requested by BEIS. Is it appropriate to submit multiple versions of Annex B as supporting documentation, populated to different levels of granularity as required? (CQ119)

Annex B sets out the information that BEIS is interested in. If a cluster is not able to provide this level of granularity we will accept more top down or high level estimates, and ask this is accompanied by the underlying methodology. It is crucial to our evaluation that at a minimum we have data on jobs and salaries. If submitters are able to provide an indication of occupation type this would also be helpful.

Where the submitter also has more granular developer estimates they should submit this alongside any top down data and an explanation of how the data relate to each other, in order to allow BEIS to best evaluate the submissions. If submitting two separate workbooks, please make this clear.

Should ‘sole costs’ (meaning company overheads) be included in Annex C? (CQ120)

Yes, company overhead costs for developing and operating the capture plants and T&S network should be included in the relevant sections of Annex C.

In relation to Annex C; when including costs associated to post-2030 ‘build-out’ scenarios, should emitter costs be included alongside T&S costs? (CQ121)

All costs associated with expansion of the transportation, storage and emitter infrastructures need to be included in the respective sheets in the LCOA to cover any expansion phases for the Cluster.

In relation to the HCP tab of Annex C; in the absence of a dedicated category for POx reformation technology, is it suitable to use the ‘other’ input cell? (CQ122)

It is acceptable to use the ‘Other’ input cells for these costs. Please identify this specifically in the row title.

In relation to Annex C; can BEIS clarify whether contingencies should be accounted for in the line item ‘Contingencies for unallocated costs’, or directly within relevant line item costs? (CQ123)

The cluster may include contingency within relevant line item costs and/or within the line ‘Contingencies for unallocated costs’. Appropriate comments should be included within the comments column to make clear the approach adopted. Reference document(s) detailing the contingency included should be provided. It is expected that the cluster will define appropriate levels of contingency for their project, with CQ031 referring the clusters to AACE Recommended Practice 40R-08 for acceptable methods of defining contingency.

Is it acceptable to include links in the submission where documents are available in the public domain? (CQ124)

Yes. Embedded links to public domain documents are acceptable.

How should negative emissions plants not producing electricity at scale be classified in the submission? (CQ125)

An ERF/EFW plant should be considered as Industrial Capture Plant, with no account made for biogenic content. Please refer to Cover sheet guidance in updated Annex C - LCOA Model v2. For BECCS plants please include as a NEP.

It appears that the LCOA model may currently unfairly represent new-build CCGT plants with capture, as the CAPEX will be inclusive of the CCGT. How does BEIS account for this? (CQ126)

Please refer to previous response to CQ078. It is expected that projects will identify those capital costs and operating costs which are deemed applicable costs for their proposed projects. Clusters should endeavor to make clear any assumptions made and any benchmarks used (if required) to determine their applicable costs.

For further clarification, in cases where a project does not consider its full project costs to be applicable costs, the project should also provide a breakdown of the full project costs (full CAPEX and full OPEX) as supporting reference information to enable BEIS to understand the comparison between the indicated applicable costs in the LCOA model and the full project costs, and to support any adjustments as necessary.

Please can BEIS clarify the purpose of its request for data on skills and training in Annex B, as this may be difficult to provide? (CQ127)

Skills and training will be evaluated based on the cluster’s potential to create skills and therefore higher wages for workers. Clusters may wish to submit qualitative evidence of how they intend to deliver skills and training benefits. If we are able to evaluate this in a consistent way across clusters we will attempt to do so but we cannot guarantee this.

Where an emitter projects has multiple technical options for its development, how should this be represented in the submission? (CQ128)

The project needs to decide which option it is going to represent in its response, and where there is some uncertainty related to the final design this needs to be described within the response and associated risk and impact assessments. The costs for the projects included in the cluster submission are for the cluster to determine.

Where an emitter projects can access natural gas at a fixed price, is it acceptable to use this price in place of that listed in the ‘Assumptions’ tab? (CQ129)

Natural gas price shall be used as per the ‘Assumptions’ tab, regardless of any commercial arrangements the project may have.

For contingencies assumed for OPEX costs, should these be included under ‘Other’ (row 120) or are they expected to be allocated in the contingency row in the CAPEX section? (CQ130)

The Cluster may choose to either enter allocated contingency combined with the OPEX line item to which it pertains, or, in the line ‘Variable Cost - Other’ and/or ‘Fixed Cost - Other’, but they must make their decision clear in the comments column. Reference document(s) detailing the contingency included should be provided. It is expected that the cluster will define appropriate levels of contingency for their project, with CQ031 referring the clusters to AACE Recommended Practice 40R-08 for acceptable methods of defining contingency.

Should carbon taxes be included as OPEX in Annex C? (CQ131)

No. Carbon taxes should be excluded from Annex C.

Is it acceptable to submit an unprotected version of Annex C? (CQ132)

No. Annex C should be submitted in its protected configuration.

Given the response to CQ022, as well as the information requested in Section 6.2 of Annex A, is it possible to include international shipping in the post-2030 expansion phase? (CQ133)

As per CQ022, International Shipping will be considered by BEIS in its assessment of the cluster under the economic benefits and learning and innovation criteria, as well as the qualitative future abatement potential sub-criterion. Please include in Annex A volumes related to international shipping in section 6.2, costs associated with International Shipping in section 8, learning & innovation in section 9, and jobs related to International Shipping in section 7 & Annex B. Please provide reference documents to support the submissions in these sections.

Costs and emissions related to international shipping should, however, be excluded from Annex C.

To what level of granularity should Annex B be completed? How should it be completed where certain information requested is unknown? (CQ134)

We have provided Annex B as a template to provide the information BEIS is interested in. We are not stipulating a specific level of granularity and expect the submitter provide a breakdown that they deem to be reasonable and proportionate. The submitter may wish to aggregate or provide averages for some rows of data. We would expect this to be accompanied alongside supplementary evidence to explain the underlying methodology and well evidenced claims on job numbers and salaries.

The submitter may decide how much of the functionality provided within the spreadsheet they wish to make use of, noting that the fundamental aspect of the assessment will be based on the submitter evidencing salaries associated with creation and safeguarding of jobs, and from providing skills and training to the workforce.

In relation to CO2 intensity of infrastructure; should individual emitters submit estimates to be aggregated by the Cluster Lead, or is it sufficient for the Cluster Lead to unilaterally make an estimate based on their own methodology? (CQ135)

In Phase-1, we have asked for a single submission to be made by the Cluster Lead organisation; we have not been prescriptive as to the extent to which individual emitter projects should contribute to this submission, as our view is that this is a matter for the Cluster Lead to determine. Please refer to our response to CQ036 for further details on this point.

Does BEIS assume that the cost of compression should be borne by the emitter or by the T&S provider? (CQ136)

For the purposes of the Phase-1 submission, the cluster should refer to our response to CQ102 for further information on how compression costs should be reported in Annex C.