The Chancellor has pledged development funding for the Humber Viking carbon capture and storage (CCS) project in a move welcomed by the sector.
The Harbour Energy-led project aims to remove 15m tonnes of º£½ÇÊÓƵ emissions by 2035, using pipelines to transfer carbon to reservoirs of the Viking gas field, deep under the North Sea. Ms Reeves also announced support for the Acorn project in Aberdeenshire, with both now following Track-1 CCS schemes in Teesside and Liverpool Bay, which received close to £22bn funding.
The exact amount to benefit the Viking project is so far unknown, with Government saying it has allocated £9.4bn for carbon capture over the Spending Review period, which will include backing for the Track-1 projects too. A final investment decision is to be taken later this Parliament, which Ministers said is subject to project readiness and affordability.
Harbour Energy executive vice president of global CSS, Graeme Davies said the Spending Review sent a "strong signal" that Track-2 and Viking CCS are priorities in this Parliament. He said: "We will work with Government on the critical steps needed to progress Viking CCS towards a final investment decision, following our completion of Front-End Engineering Design and approval of the onshore pipeline Development Consent Order earlier this year.â€
Earlier this month a group of Humber business leaders and industry-focussed academics called for the backing of Viking to "future proof" heavy industry in the Humber. They said that cleaning up one of the country's hardest to abate sectors could prompt a jobs boom and significant regional economic stimulus.
Jonathan Briggs, director of development and delivery at power provider VPI, which is a Viking CCS member, said: "We are delighted that the Government will move forward with Viking CCS. We are grateful to all the Government officials, our MPs in the Humber, Melanie Onn and Martin Vickers, and the many organisations in the region who have worked tirelessly to back this project.
"This decision provides a once-in-a-generation opportunity, delivering significant private investment while protecting existing jobs and creating new ones based on the industries of the future. But as always, details matter, and we look forward to learning more about the announcement soon."
David Whitehouse, CEO of trade body Offshore Energies º£½ÇÊÓƵ, said: "The Chancellor was right to say that energy security is national security and also to recognise the need to reduce reliance on overseas oil and gas. Domestic production is the path to energy security and economic growth.
“The support for the next phase of carbon storage projects in Scotland and Humberside is welcome, and an important step towards final investment decisions later in this parliament. Together Viking and Acorn have the potential to unlock over £25bn of investment by 2035, creating over 30,000 jobs at peak construction,
"These projects will provide the pathway to support the decarbonisation of º£½ÇÊÓƵ industries and are critical to the Government's clean power objectives. We will continue to work with Government to detail the long-term support required to deliver these projects and unlock the º£½ÇÊÓƵ's wider CCS ambitions
"We agree with the chancellor that it matters where we make things and who makes them. Homegrown energy production which will protect security and jobs, must be at the heart of our industrial strategy."
