Notice

Cluster sequencing for CCUS Track-2: clarification questions with responses (added 20 April 2023)

Updated 20 December 2023

This is the public record of clarification questions (CQs) which have been submitted to DESNZ in relation to the CCUS cluster sequencing process, as well as DESNZ’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.

Why is there no timetable for the Track2 process? When will a final decision on selected Track-2 T&S systems be made? (CQ001)

The timelines for Track-2 and timings for final decisions are dependent on the outcome of the expression of interest (EoI) process which will run until 28 April.

The information provided through the EoI process will be used to assess the quantity of potentially eligible Track-2 transport and storage (T&S) systems and to inform the design of the Track-2 assessment and selection process.

We intend to provide an update in the summer, following the closure of the EoI process.

What is the intention of the EoI process? Is the Department for Energy Security and Net Zero trying to establish a view of industry pipeline? (CQ002)

The intention of the EoI is to test our view that the Acorn and Viking T&S systems, given their maturity, are best placed to deliver government’s objectives for Track-2, subject to final decisions, due diligence, consenting, subsidy control and value for money assessments.

Only T&S systems that are able to meet the eligibility criteria set out in the Track-2 Guidance document should submit an EoI.

We encourage T&S systems not eligible for Track-2 to continue their decarbonisation plans where this is feasible. We are open to continuing engagement outside of the EoI process with all who wish to stay involved and informed about the CCUS programme.

Once the EoI has been submitted, what is the process to evaluate Track-2 applications? (CQ003)

The EoI form can be found on the Track-2 landing page, and the deadline for completing it is 28 April 2023.

Government reserves the right to request further information from T&S systems submitting an EoI form, as well as Acorn and Viking, to demonstrate compliance with the Track-2 eligibility criteria, after the EoI process has been completed.

The information provided through the EoI process will be used to assess the quantity of potentially eligible Track-2 T&S systems and to inform the design of the Track-2 assessment and selection process. Further information may be required to assist in these aims.

If additional T&S systems that meet the eligibility criteria do come forward, government expects to request further evidence and information from all T&S systems, including Acorn and Viking, and progress to an assessment and selection stage.

We will set out further details on this process for assessment and selection later in 2023.

Will there be other opportunities for T&S systems not eligible for Track-2? Is there any prospect for getting an economic licence without government support? (CQ004)

We encourage T&S systems not eligible for Track-2 to continue their decarbonisation plans where this is feasible. We are open to continuing engagement outside of the EoI process with all who wish to stay involved and informed about the CCUS programme.

We recognise the importance of providing further certainty for industry. We will set out a vision for the UK CCUS sector, setting out how CCUS will support our net zero ambitions to raise confidence and improve visibility for investors.

Subject to its Parliamentary passage and approvals, the Energy Bill 2022 will provide the power to grant economic licences to T&S network operators. Our intention is that the first T&S licences will be granted through the cluster sequencing process.

Must an eligible Track-2 T&S system be connected to UK emitter projects in the initial phase? Is internationally sourced CO₂ ruled out at this stage? (CQ005)

For a T&S system to be considered for Track-2, it must meet the eligibility criteria, including that it is based in the UK. Projects for the initial phase of capture must connect by pipeline and so those projects will need to be based in the UK.

We will set out the process by which capture projects for Track-2 will be selected in due course but expect the initial focus to be on projects that can connect by pipeline.

However, we expect T&S systems participating in Track-2, to be able to demonstrate the potential to receive and store CO₂ through non-pipeline transport (NPT) in a timeframe consistent with Track-2 objectives.

Can you clarify if projects that rely on shipping (NPT) are included or excluded from the outset of Track-2? (CQ006)

We will set out the process by which capture projects for Track-2 will be selected in due course but expect the initial focus to be on projects that can connect by pipeline.

However, we expect T&S systems participating in Track-2, to be able to demonstrate the potential to receive and store CO₂ through non-pipeline transport (NPT) in a timeframe consistent with Track-2 objectives.

Is the government’s ambition to capture and store at least 10 megatonnes a year (Mtpa) of CO₂ by 2030 expected to be achieved by one T&S system or across both Track-2 T&S systems? (CQ007)

We are looking to select 2 new CO₂ clusters that together have the credible potential to store at least 10 Mtpa of CO₂ by 2030 through a range of carbon capture projects.

The Track-2 guidance sets out government expectations for what will be required in order for T&S systems to meet this criterion.

How can the T&S system/applicant credibly demonstrate eligibility for the criterion that it must be able to credibly demonstrate a clear pathway to rates of injection consistent with the at least 10 Mtpa ambition by 2030? What level of evidence is required at this stage? (CQ008)

Applicants are not required to submit evidence at the EoI stage but have been asked to provide a short summary explaining how they meet this criterion.

The Track-2 guidance sets out government expectations for what will be required in order for T&S systems to meet this criterion.

Our objective is to select 2 new CO₂ clusters that together have the potential to store at least 10 Mtpa of CO₂ by 2030 and we do not expect an individual T&S system to demonstrate that it can achieve an injection rate of 10Mtpa by 2030.

Whilst we do not require any particular rate of injection to be demonstrated at this stage and will not rank T&S systems based on the information provided in the EoI process, we would like to understand your anticipated rates of injection. Government reserves the right to set out criteria for capture requirements in any future Track-2 assessment and selection process.

The aim of this criterion is to ensure that Track-2 T&S systems can be operational, i.e., establish ongoing injection of captured CO₂ volumes into the store, in a timeline that enables the system to ramp up rates of injection sufficiently, in line with our at least 10Mtpa by 2030 ambition. We are expecting both clusters to make a substantial contribution to the overall ambition of at least 10 Mtpa.

What does pipeline mean in this context? (“We expect, in the first stage, to consider only those projects that can connect by pipeline as the initial projects”) (CQ009)

The initial projects must connect to the store (by which we mean a permanent store within a (prospective) licensed area) via pipeline such that the T&S System is a full ‘source to store’ pipeline transportation system.

Would it be beneficial for T&S systems to provide additional information/appendices in their responses to the EoI? (CQ010)

Any information provided above the word limits will be removed before the EoI is considered.

We are not looking for supporting evidence at this stage but as set out in the Track-2 guidance, reserve the right to request further information from stores submitting an EoI at later stages of the Track-2 process.

What level of detail will be required (for both the projects and T&S systems) at the appraisal stage? Is it expected to be a very comprehensive process? (CQ011)

In developing Track-2, government aims to ensure experience and knowledge gained from Track-1 is embedded.

We will set out the next steps for Track-2 in the summer, following closure of the EoI process.

If additional T&S systems that meet the eligibility criteria come forward in the EoI window, government expects to request further evidence and information from all T&S systems, including Acorn and Viking, and progress to an assessment and selection stage.

The information requested at such an assessment stage will be similar, in terms of detail and breadth, to the Track-1 Cluster Sequencing for CCUS deployment: Phase-1 process. However, we expect any Track-2 assessment and selection process to be streamlined, building on lessons learned from Track-1.

Can you advise how technology partners can participate in Track-2? (CQ012)

We are focusing on CO₂ T&S systems at this stage of the Track-2 process. We have therefore opened an EoI period for (prospective) carbon storage licensees who would like to be considered for Track-2. We will set out the process by which capture projects for Track-2 will be selected in due course.

We expect to consider the proposed capture solutions as part of information received from prospective capture projects – the relationship between capture projects and their technology partners will be a matter for those projects to consider themselves.