© Paul Campbell/PA Wire 
The UK government has pledged development funding to progress flagship carbon capture and storage (CCS) projects in Aberdeenshire and the Humber after they secured backing in the latest spending review.
Energy Secretary Ed Miliband announced plans to invest £200 million to advance the Acorn CCS project in Aberdeenshire, which developers hailed as a “milestone” and a “strong signal” that the projects are a priority for the Labour government.
Speaking on a visit to the St Fergus gas plant where the Acorn project will be anchored, Miliband said: “There are huge opportunities for this to be the place where the rest of Europe transports its CO2 and that means huge extra job opportunities.
“We know that the North Sea can be the global centre for carbon capture and storage and Acorn is going to make it happen.”
Funding for the Viking project in the Humber was not disclosed.
The pledge was welcomed after questions were raised about timing and the scale of investment set out by Chancellor Rachel Reeves in her spending review Wednesday.
The decision came after several warnings that investors in both projects could walk away from planned investments due to years of delay in government backing.
Both Acorn and Viking are designated as so-called track two projects, behind track one schemes Hynet in the North West of England and Northern Endurance Partnership (NEP) in Teesside, which have both since reached financial close.
These have been allocated £21.7bn the Labour government over ten years. In the spending review, Reeves confirmed that the UK would be allocating £9.4bn to CCS out of these funds in this parliament.
In Aberdeenshire, the government confirmed that support for Acorn would be delivered within the next few years and that this support could unlock up to £7 billion in private sector investment.
Developers expect construction phase at Acorn with create 15,000 jobs and another 20,000 will be involved with building the Viking CCS scheme on the Humber.
Meanwhile, Acorn backers have estimated it will safeguard 18,000 North Sea jobs that would otherwise have been lost with the decline of the oil and gas industry. These jobs are expected to
Tim Stedman, the chief executive of Storegga, which is leading the development of Acorn, said the funding on offer “will enable the critical work needed to reach financial investment decision” (FID) on the project.
Acorn general manager Nic Braley said the funding provided “greater detail” following the spending review.
“We are going to dive in and try to understand little more about what is included in that. But it is a key part of maturing our project and learning lessons from other clusters which have already moved forward finding out ways in which we can optimise and deliver our project in the best possible way. The funding from government will be a major contribution to that.”
Olivia Powis, the chief executive of the Carbon Capture and Storage Association (CCSA) said the spending review commitment and the development funding for Acorn and Viking marked a “clear step forward”.
“The commitment to taking a final investment decision this parliament, subject to readiness and affordability, for these clusters is welcome and helps towards giving the industry the confidence it needs to move forward with major investments in low-carbon infrastructure.
“This is a clear step forward to progressing the next clusters in Scotland and the Humber.”
In a statement, Graeme Davies, executive vice president CCS at Harbour Energy, which is backing both Acorn and Viking, said the spending review commitment was a “strong signal” that the track 2 projects were “an infrastructure-led economic growth priority in this parliament”.
