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Sir Ian Wood calls on UK Government to ‘reconsider’ decision to omit Scottish Cluster from first phase

Ian Wood Scottish Cluster
Sir Ian Wood

Sir Ian Wood has called on UK ministers to “reconsider their decision” not to pick Scotland as an initial base for carbon capture and storage (CCS).

The former oil and gas tycoon said Westminster should add a “third cluster” to the ‘Track 1’ programme in order to accommodate the Scottish Cluster.

He has previously taken aim at the UK Government’s CCS strategy, accusing it of lacking ambition.

Energy minister Greg Hands dealt a “catastrophic blow” to the north-east on Tuesday when he confirmed the Scottish Cluster had missed out on the first round of funding.
It has been selected as a “reserve cluster”.

Instead, the HyNet and East Coast Clusters, based in the north-west and north-east of England respectively, will be the first to benefit from financial backing.

A number of politicians from around the country have reacted angrily to the decision, accusing the UK Government of omitting Scotland from its levelling up agenda.

At the heart of the Scottish Cluster’s bid was the Acorn project, based at the St Fergus gas terminal near Peterhead.

The Harbour Energy (LON: HBR), Shell (LON: RDSA) and Storegga backed initiative is proposing to use oil and gas infrastructure to store carbon under the North Sea.

In a statement, Mr Hands said the Department for Business, Energy and Industrial Strategy (BEIS) will “continue to engage” with the Scottish Cluster throughout “Phase 2” of the process.

As set out in the 10 Point Plan, the UK Government will select four clusters, two to be up and running by 2025 and two more by 2030. They will benefit from a share of £1billion.

Shell Acorn CCS
The Acorn project at the St Fergus gas terminal is pioneering the development of CCS in the UK.

Sir Ian, who is chairman of ETZ Ltd, a not-for-profit company behind a plan to create an Energy Transition Zone near the Aberdeen harbour expansion, was one of a number of business figures who signed a letter urging the UK Government to pick the Scottish Cluster.

Responding to the news that Scotland had been overlooked, he said: “We are hugely disappointed at the decision of the UK Government not to approve the Scottish Cluster as part of the CCS track 1 programme. This makes little economic or environmental sense and is a real blow to Scotland.

“Scotland is the most cost-effective place to begin CCUS in the UK given the capacity for CO2 storage in the North Sea and the existing oil and gas infrastructure available to repurpose for CO2 transport and storage. Vitally, there is also a huge opportunity for oil and gas firms, domestic supply chain companies and our wider economy to harness the skills and expertise of our current workforce to create many good, green jobs in the coming years and contribute significantly to the net zero ambition.

“The Committee on Climate Change (CCC) has stated that “CCS is a necessity not an option” to achieve net zero targets and if we are serious about decarbonisation then we must move much more quickly and comprehensively than we have done to date.

“We have previously made clear that there is a strong case for 5 or 6 clusters to be backed now to encourage collaboration across the UK and to accelerate these efforts. At the very least I urge the UK Government to reconsider their decision and add a third cluster to the track 1 programme which should undoubtedly be the excellent Scottish bid.”

Sir Ian isn’t alone in urging the UK Government to think again.

Ineos, one of the businesses relying on Acorn to decarbonise its operations, has also called for a third cluster to be added.

Ineos signed a Memorandum of Understanding (MoU) with the scheme earlier this year as part of efforts to axe emissions from the petrochemical giant’s Grangemouth site.

Plans were being explored for carbon to be transported from the Firth of Forth to the north-east where they could be safely stored.

A spokesman for Ineos said: “Ineos Grangemouth notes the UK government’s decision to position the Scottish cluster as a reserve cluster.

“The Scottish Cluster bid met the Government’s eligibility criteria and performed to a good standard against the evaluation criteria.

“It is a disappointing decision and we hope that the UK Government will reconsider and will support three CCS schemes in Track 1.

“We are committed to achieving Net Zero and delivering substantial reduction in CO2 emissions by 2030.  Our plans do rely on Government support for The Scottish Cluster which has an excellent chance of being awarded given that it is on the reserve list.

“Grangemouth is not changing its plans and we will continue with our studies and engineering.”

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