A six point plan has been unveiled for delivering Carbon Capture and Storage in the UK.
The Oxburgh report is said to reset the approach to prcing, delivering infrastructure and enabling UK climate action.
The technology is essential to meeting the carbon targets which have been envisaged by the Paris Agreement on tackling climate change.
Both the US and China have now ratified this pledge.
The report recommends the creation of a CCS delivery company which will manage construction and risk for the first projects, similar to the successful delivery of the 2012 Olympics or the current Crossrail project.
It says this would create transport and storage infrastructure which can be privatised when properly established and could cut the cost of meeting the UK’s climate targets by billion each year.
Professor Stuart Haszeldine, SCCS Director and report co-author, said: “What has been missing until now is the method for making CCS happen. The Oxburgh report sets out six clear actions, including the establishment of a CCS Delivery Company and linking CCS Certificates for CO2 storage to contracts which incentivise CO2 capture from heavy industry.
“Through a delivery company, with regulated and reliable profits, the government can attract investors to provide the necessary infrastructure, and there are sites in the UK’s industrial heartlands, such as Grangemouth, Teesside and Mersey, where CO2 resulting from industrial processes could be easily captured and transported by existing pipelines or shipping to offshore storage sites. These are the natural places to grow the first small CCS start-ups.
“Once operating, a CCS system has value for other emitters and can be added to incrementally. The infrastructure itself has bankable value. Such networks are well understood by financiers in the UK and are regulated to reset prices at three to six-year intervals, providing a reliable financial return prized by investors.
“With offshore pipelines already being decommissioned, actions that maintain infrastructure are needed immediately. Some pipelines can be taken into temporary public ownership while new CCS organisations are created. Using these, we could begin storing CO2 commercially by the early 2020s.
“Initial government support is necessary for low-carbon technology, such as CCS, to gain a foothold. Compare the subsidies that have enabled growth in the renewables sector. But we believe that initial investment need not be large. Just £300 million is enough for engineering design studies, which would unlock the investment needed to build a project. Once established, the CO2 networks can be privatised and government investment recovered.
“A new CCS Obligation system will create a market for CO2 storage and ensure a long-term trajectory for decarbonising the UK economy. Trading CO2 certificates linked to power or industry would not achieve the required reductions fast enough or have any longevity. By mandating a quantity of CO2 to be stored each year, this creates a predictable and controllable pathway to ‘net-zero’ carbon by mid-century, which business can rely on.”