Scotland’s business community has urged the UK government to back Aberdeenshire’s Acorn Carbon Capture and Storage (CCS) project.
A variety of groups, including the CBI, Prosper, the Institute of Directors, Scottish Financial Enterprise and Scottish Chambers of Commerce, wrote a joint letter to chancellor of the exchequer Rachel Reeves.
They warned that failing to act now threatens thousands of jobs, billions of pounds of investment, and economic growth.
ETZ Ltd chairman Ian Wood warned that further delays to Acorn CCS could have serious economic consequences for Scotland.
“Acorn CCS is a crucial catalyst needed to protect skilled jobs and unlock billions of pounds in investment,” he said. “The UK government must act now to develop this transformational opportunity that will support industrial decarbonisation across the UK as well as much needed economic growth.”
The Acorn project is a joint venture between Shell, Harbour Energy and North Sea Midstream Partners. Centred on the St Fergus gas terminal, it involves capturing and transporting up to 20m tonnes per year of carbon dioxide from industrial sites for storage under the North Sea.
It is a one of the projects being developed under the so-called “track-2 process”. The track-1 projects, the HyNet and East Coast Cluster, were selected in October 2021, with nearly £22bn in funding allocated for them in October last year
While the Scottish government previously announced an £80 million funding tranche would help develop the Acorn project, the UK government has been slow to provide its backing.
And until it provides funding, the Scottish government cannot distribute its £80m contribution.
Developers and other stakeholders have previously called on clarity from the UK government about funding to provide investment certainty. This lead energy secretary Ed Miliband to say he would look at ways to speed up approval for Acorn.
© Supplied by StoreggaThe letter pointed to economic research estimating that accelerating Acorn will add £17.7bn to UK GDP by 2050, create over 10,800 jobs during construction, and sustain 4,700 long-term operational roles.
A fast-tracked decision would also enable early carbon capture at Peterhead Power Station, a 900MW gas-fired plant critical to UK energy security.
Additionally, Acorn CCS is vital for Grangemouth, Scotland’s largest industrial emitter, where rising carbon costs could put thousands of jobs at risk.
CO₂ captured from sources in other parts of the UK or internationally could be shipped to the Acorn stores via Peterhead Port – providing an option for emitters across the UK which do not have immediate access to CO₂ storage and the potential to create substantial international trade opportunities.
Peterhead Port Authority chief executive Graeme Reid said a deal could help replace oil and gas revenues for the Port “securing its long-term future”.
He added: “Conversely, without Acorn, a just transition will not succeed, net zero targets will be impossible to achieve, many of the potential options for Grangemouth redevelopment rely on carbon capture and therefore most likely won’t be developed, likewise with Peterhead power station developments.
“Given that to date, investment has been promised then delayed four times by government, this summer’s comprehensive spending review (the first of the Labour government) will be a pivotal moment for Acorn. We need the right decision to be made for the benefit of the UK, Scotland and the North East, and to ensure we do not see investment heading outside of the UK.”
Scottish Chambers of Commerce chief executive Dr Liz Cameron stressed the urgency of government action.
“Scotland cannot afford further delays on Acorn CCS,” she said. “The government has pledged a just transition for our workforce, but those promises must now be matched with decisive investment.
“This is a pivotal moment for Scotland’s economy, and we need clear signals that Westminster is serious about delivering a net-zero future that includes industrial communities like ours.”
