The UK Government has pledged £21.7 billion to develop large-scale carbon capture and storage (CCUS) projects in Teesside and Merseyside, marking a significant step towards achieving net zero emissions by 2050. This investment is expected to create 4,000 direct jobs and support up to 50,000 jobs in the long term, while attracting £8 billion in private investment. The projects are set to begin commercial operations in 2027, capturing CO2 emissions from industrial sources and storing them safely underground.
The Teesside project, known as Net Zero Teesside Power (NZT Power), is a joint venture between bp and Equinor. It will be one of the world’s first commercial gas-fired power stations equipped with carbon capture technology. This facility alone could generate up to 860 megawatts of electricity—enough to power 1.3 million homes—while capturing up to two million tonnes of CO2 per year, which will be stored beneath the North Sea by the Northern Endurance Partnership (NEP). Meanwhile, the HyNet project in Merseyside will reduce emissions by up to 10 million tonnes annually, the equivalent of removing four million cars from the road.
"The Teesside project alone could generate up to 860 megawatts of electricity—enough to power 1.3 million homes—while capturing up to two million tonnes of CO2 per year,"
Prime Minister Keir Starmer hailed the investment as a means of “reigniting our industrial heartlands” and preparing the UK to lead in future industries. The funding will be allocated over 25 years, supporting both CCUS and hydrogen projects, which are considered vital for decarbonising heavy industries like steel and cement production. These sectors are otherwise difficult to clean up using traditional renewable energy methods.
What is Carbon Capture and Storage (CCUS)? Carbon capture and storage (CCUS) technology captures carbon dioxide (CO2) emissions produced from industrial processes or burning fossil fuels and either reuses the CO2 or stores it underground, often in depleted oil or gas fields. This process prevents CO2 from entering the atmosphere, where it would contribute to climate change. The technology is especially valuable for industries where reducing emissions through other means is challenging, such as cement and steel production.
Why is CCUS Important? CCUS is considered crucial in the global fight against climate change, as it provides a way to reduce emissions from hard-to-decarbonise industries while enabling continued economic growth. The UK’s Climate Change Committee and international bodies like the UN view CCUS as essential for meeting long-term climate goals. By integrating CCUS with hydrogen production, the UK aims to position itself at the forefront of clean energy technology, helping industries transition away from fossil fuels without the need for deindustrialisation. This transition is expected to not only reduce emissions but also generate new job opportunities, particularly in regions hit hardest by deindustrialisation.
While some environmental groups argue that the technology could prolong the life of fossil fuels, proponents believe that CCUS is a necessary tool for industries that are difficult to decarbonise through other methods. As the sector matures, the government estimates it could contribute £5 billion per year to the UK economy by 2050.