CCUS Cluster Sequencing Track-2: Market update December 2023
Updated 20 December 2023
The UK government is committed to further development of carbon capture, usage and storage (CCUS) through the Track-2 process which will establish 2 new clusters, contributing to our ambition to capture and store 20-30 megatonnes per annum (Mtpa) of CO₂ across the economy by 2030.
On 31 July 2023, the Department for Energy Security and Net Zero (DESNZ) announced that, following a review of expression of interest (EoI) applications against the Track-2 eligibility criteria, Acorn and Viking transport and storage (T&S) systems, due to their maturity, remain best placed to deliver our objectives for Track-2, at this stage, subject to final decisions, due diligence, consenting, subsidy control, affordability and value for money assessments.
In developing the Track-2 process, government aims to ensure that experience and knowledge gained from Track-1 is embedded. The Track-2 process will therefore be adapted from Track-1 to establish clusters at pace and provide a platform for flexibility and innovation in future buildout rounds, as well as to carry out T&S sizing and readiness before launching the capture project selection.
Government has started initial engagement with Acorn and Viking T&S systems, and in early 2024 will ask Acorn & Viking to submit plans for assessment of an ‘anchor phase’ of initial capture projects provisionally targeting deployment from 2028-2029, subject to technical feasibility, affordability, and value for money. To provide context, we will also request that Acorn & Viking provide a provisional cluster expansion plan for a ‘buildout phase’ of additional network and storage expansion to enable additional projects. Capture projects wishing to connect to Acorn and Viking clusters pre-2030 may consider engaging with the transport and storage companies (T&SCos) directly if they have not already done so. The anchor plans would need to be consistent with the requirement for the credible demonstration of connecting via pipeline to at least two projects for an initial phase of capture and enabling future phases of store and network expansion to enable both additional piped and non-pipeline transport (NPT) projects. There will be a submission window for the T&S systems to submit their anchor project proposals in early 2024, along with updates on the buildout access plans.
Further guidance on the process, the criteria applicable to any projects in such anchor phase, and the respective roles of government and the T&S system will be provided in due course – DESNZ will continue to consider matters such as subsidy control rules, Value for Money (VfM) assessments, delivery of emissions savings and affordability in this process and reserves the right to explore other delivery options. Any T&S systems submissions would be subject to eligibility checks, deliverability credibility, commercial viability, cost assessment, due diligence and a negotiations process.
This approach is being taken to establish the cluster deployments quickly with mature projects and prove operation of the earliest storage volumes, with the buildout phase to provide opportunity for additional projects access to the clusters soon afterwards.