Four UK industrial firms and local public sector bodies are uniting to advance a CCS project in manufacturing hub Teesside, northeast England, which could bury 2.8 mt of CO2 per year from 2024.
- EU ETS-regulated plants owned by Thailand’s SSI Steel, UK fertiliser firm GrowHow, industrial gas producer BOC Linde of Germany and Korea’s petrochemical manufacturer KP Chemical initial ‘anchor’ companies, more could be added.
- Group used £1m of UK government funding to produce blueprint, seek more government cash under its yet-to-be defined second phase of CCS support.
- NOTE- UK is currently putting up £1bln ($1.5bln, €1.4bln) for CCS, bid for by Drax’s coal-fired power based project and Shell’s Peterhead gas project.
- NOTE- Rest of EU lags, with advanced plans for CCS only in Norway, Netherlands. Firms unwilling to invest without further public backing. Central EU funding to grow post-2020. Some EU oil majors in early talks with other industry to pool cash to kickstart projects.
“We have a comprehensive programme of work in place to promote carbon capture and storage and globally the UK is independently recognised as having one of the best policy environments for the development of CCS. What Teesside Collective is doing goes hand in hand with this Government’s ambition to upskill the workforce and support thousands of jobs in the North,” said Lord Bourne, a UK Energy and Climate Change Minister, at the project’s London launch on Wednesday.
The Teesside Collective blueprint includes:-
- Costs equivalent of £95/tCO2 over 20 years to store 56mt CO2, requiring £1.5 bln of finance at a 7% discount rate to give 13% rate of return.
- French bank SocGen concluded EUA price not enough to incentivise, recommends additional funding via the UK providing a CfD pegged to EUA price (as outlined here) or capacity mechanism with top-up payments depending on how much CO2 is stored.
- Could save storage costs by using the offshore site considered by the Drax CCS project.
By Ben Garside – firstname.lastname@example.org