Mike Smith, CEO, NECCUS (Opinions expressed here are my own)
A recent Ipsos-Mori poll in 14 countries across the G20 shows a majority in every country surveyed agrees economic recovery should “prioritize climate change.” In the UK, the poll showed that 66% of Britons believe that in the long-term Climate Change is as serious a crisis as COVID-19, with 58% agreeing that climate change should be prioritised in any economic recovery.
However, the government must balance that sentiment with the need for fiscal support and regulatory relief for heavy industry and energy sectors that are both hard hit and high emitters of CO₂.
So, what are the prospects for CCUS and Hydrogen in any post COVID-19 recovery?
Every indication we are seeing from the Government at this stage indicates that the current and future pipeline of funding and support for CCUS and Hydrogen is not impacted by COVID-19 funding allocation issues. Likewise, the level of engagement with key ministers and ministries is also un-affected, even if COVID-19 places restrictions on the form of these engagements. This is very positive.
In addition, the UK is in the global spotlight as host of the U.N.’s delayed COP26 climate negotiations sometime in 2021, as well as holding the G7 presidency. The Government will seek to demonstrate global leadership in the post COVID economic recovery, and this is likely to involve green stimulus within a wider economic stimulus, possibly with these being linked in some way for industries which are high-emitters of CO₂.
For CCUS and Hydrogen, whilst the lack of an energy white paper in the Spring has been disappointing, the BEIS organised expert groups are pointing towards clear fiscal mechanisms to support carbon capture, CO₂ transport and storage, and hydrogen production. These mechanisms are largely as expected, being built around CfD and RAB structures. Much more detail is needed in this respect but the playing field is becoming clearer. It is also becoming clear that for industry the focus will remain on the core industrial clusters (Scotland being one), and the heavy industries which BEIS believe are the leading initial CCUS candidates.
The prospects for CCUS and Hydrogen being further promoted within a post COVID-19 recovery are generally good. NECCUS is supporting this by: continuing to promote the very real advantages that Scotland has, supporting the ongoing projects in Scotland, and leading collaboration around the Roadmap process which will be a way of tangibly demonstrating to the Government that Scotland can deliver Net Zero industry – quickly, cost-effectively, and coherently.