© Scott Baxter / DCT Media 
The UK’s carbon capture storage (CCS) projects that have been long awaiting government support may have to wait further, despite “support” being announced in the government’s spending review.
Chancellor Rachel Reeves told the House of Commons that she could “announce support for the Acorn project in Aberdeenshire” in addition to the Viking CCS project in the Humber.
However, the 2025 spending review has little detail on the monetary value of this support, instead explaining that “a final investment decision will be taken later this parliament”.
This “glaring omission” has prompted criticism from SNP Westminster lead and Aberdeen South MP Stephen Flynn.
© Supplied by StoreggaFollowing Reeves’ speech in parliament, Flynn said: “The glaring omission in today’s announcement was any detail on the scale of funding and the timescales for delivery which stands in stark contrast to the £22 billion commitment the Labour Government has already given to carbon capture projects in England.
“Westminster has had twenty years to hammer out the detail on Scottish carbon capture, so it must now deliver meaningful funding and concrete support at pace.”
Funding from the government for the Acorn and Viking projects is also “subject to project readiness and affordability”, the spending review detailed.
Late last year, the Labour government unveiled plans to deliver £21.7bn over the next 25 years for two track-1 schemes, the Hynet project, which takes in sites including Liverpool Bay and the Stanlow manufacturing complex, and the East Coast Cluster, which comprises industrial projects across Teesside.
© HOC/UNPIXSThe fact that the north-east of Scotland’s Acorn CCS project was omitted from track 1 funding and later relegated to track 2 status prompted anger from local business leaders.
“What today must signal is the beginning of a seriousness about Scotland’s energy industry from a Labour Government which has so far displayed the opposite – whether that transpires will be seen in the level of finance behind today’s announcement and a change to the fiscal regime our offshore industries operate under,” Flynn added.
“You cannot secure economic growth, energy security and net zero without harnessing the existing skills we have in our offshore industries and without proper investment in key projects like Acorn – the SNP will always demand our resources are used to the benefit the people of Scotland and an end to the absurd circumstances whereby energy bills are going up in our energy rich country while energy jobs are going down.”
Government has ‘vital role to play’ in Acorn’s success
© Supplied by ShellNic Braley, general manager of Acorn, said that the UK government has ” a vital role to play in the success” of the Scotland carbon storage cluster.
In response to Reeve’s announcement, Barley added: “We will continue to work closely with them to discuss the detail of this announcement and how we proceed.
“We look forward to developing the next phase of the project, which will require both short-term and sustained, long-term commitment from government to enable FID.”
He said the announcement to support the Acorn project towards FID within this parliament serves as “an important step” in decarbonising “hard-to-abate industries in Scotland”.
“Acorn will support economic growth, create and safeguard tens of thousands of jobs and deliver the much-needed CCS infrastructure to support a successful energy transition for our communities,” Barley added.
© Supplied by Viking CCSHarbour Energy, a partner in both the Acorn and Viking projects, said the announcement sends a “strong signal that track-2 and Viking CCS are an infrastructure-led economic growth priority in this Parliament.”
Graeme Davies, executive vice president of global CCS for Harbour, commented:
“We will work with government on the critical steps needed to progress Viking CCS towards a final investment decision, following our completion of front-end engineering design and approval of the onshore pipeline development consent order earlier this year.”
Further details lacking
Details on CCS funding weren’t the only thing lacking in the spending review, one commentator said.
Sheena McGuinness, co-head of energy and natural resources at RSM UK, called out the lack of details surrounding grid upgrades as well as track 1 project support.
“At a time when offshore producers struggle to get energy to the point of use due to the grid not being fit for purpose, and the resulting compensation payments that can rack up required in order to balance the grid, key investment into our network was missing in today’s announcement,” she said.
“Essentially, if we can improve our grid network then we could unlock more renewable energy, which is cheaper to produce, to fuel our future energy mix.
“It is hoped this challenge will be addressed in next week’s infrastructure strategy, along with more detail on the support for the Acorn and Viking carbon capture and storage projects, and much-needed clarity on the role of GB Energy and its plans.”
© Supplied by VPIThe government said it would allocate £9.4bn in capital budgets over the spending review period, a move supported by carbon capture firm Carbon Clean.
Despite this, the organisation called for a contracts for difference mechanism to be introduced for the sector to secure financial viability to “maintain this momentum”.
Carbon Clean’s Anniruddha Sharma said: “This would unlock private investment, drive down costs, and accelerate deployment by providing the necessary clarity for future business models – key to building a thriving CCUS industry while ensuring value for taxpayers.”
‘We hope it will allow work to proceed’
Despite the lack of details on when investment will be delivered to Acorn and Viking, or how much will be allocated, industry commentators have welcomed the announcement of support.
Aberdeen and Grampian Chamber of Commerce (AGCC) CEO Russell Borthwick, who has long campaigned in favour of Acorn, welcomed support for the project, which he said was “of vital strategic importance to the energy transition”.
Borthwick added: “Alongside partners, we recently coordinated open letters to the Chancellor from Scottish businesses and elected representatives from across Scotland calling for the project to be progressed as an immediate priority – highlighting the huge potential to unlock £7bn in private investment, to protect and create thousands of high value jobs, and to support our supply chain through the transition.
© Supplied by Aberdeen and Grampia“While we await further detail around the scale of government support, we hope it will allow work to proceed on the project’s preliminary stages and move it forward. The UK is going to require five CCS projects, at scale, to meet its climate targets – the north-east of Scotland has a vital part to play.”
It is worth noting that Flynn also supported the announcement, despite its lack of details.
“The SNP has campaigned for investment in Scottish carbon capture for over a decade, so it is welcome that after years of Westminster delays and funding snubs, we have finally secured a measure of progress towards making the Acorn project a reality to create jobs and investment for our communities,” the SNP leader said.
Regulator and trade body backs Acorn support
© Supplied by Kath Flannery / DCTThe UK regulator in charge of carbon storage licences, the North Sea Transition Authority (NSTA), also gave its two cents on the announcement.
Chief executive Stuart Payne said the announcement of support for Acorn and Viking was “great news”.
He added: “The NSTA is proud to have awarded storage permits to the Endurance and HyNet projects and will continue working with them, and Acorn and Viking, and other licensees to help drive investment, jobs and economic growth and help the UK hit the net zero by 2050 target.”
Trade body Offshore Energies UK (OEUK) said that the announcement served as an “important step towards final investment decisions” for the Scotland and Humberside-based projects.
© Supplied by OEUKOEUK chief executive David Whithouse added: “Together Viking and Acorn have the potential to unlock over £25bn of investment by 2035, creating over 30,000 jobs at peak construction.
“These projects will provide the pathway to support the decarbonisation of UK industries and are critical to the government’s clean power objectives.
“We will continue to work with government to detail the long-term support required to deliver these projects and unlock the UK’s wider CCS ambitions.”
© Supplied by Global Underwater HuGlobal Underwater Hub (GUH) boss Neil Gordon said that government support will “open up major opportunities for the UK’s world-class subsea supply chain.”
The GUH chief executive commented: “With decades of experience and proven capabilities from the North Sea, the UK is well placed to lead in CCS technology.
“Global Underwater Hub welcomes this support, which will drive innovation, create high-value jobs and enhance energy security by enabling our subsea industry to play a key role in the energy transition.”
What is Acorn?
© Supplied by Acorn projectThe Acorn CCS project in Aberdeenshire was announced as a winner of the £1bn UK Government track 2 competition in 2023.
It will use infrastructure at the St Fergus terminal – which lands about 25% of the UK’s supply – to send CO2 underground into depleted gas reservoirs in the North Sea.
For the Peterhead region, the announcement of track 2 status followed a decades-long wait to get local CCS projects running following cancelled projects in 2007 and 2015.
North Sea operators Shell and Harbour Energy are developing Acorn as a joint venture with Storegga and North Sea Midstream Partners.
