The UK Labour government, under Chancellor Rachel Reeves and Prime Minister Keir Starmer, has announced a significant investment of nearly £22bn over the next 25 years to develop carbon capture and storage (CCS) technologies. This funding, one of the largest green initiatives in recent memory, will be used to establish two major CCS hubs: one in Teesside, and another spanning the north-west of England and parts of north Wales.
With just a few weeks until the October 30 budget, Reeves described the announcement as part of a broader strategy to boost economic growth, particularly in the struggling industrial sectors. CCS is considered a key component of the government's plan to meet the UK’s target of net-zero carbon emissions by 2050.
Reeves, alongside Prime Minister Keir Starmer and Energy Secretary Ed Miliband, will visit the Liverpool city region on Friday to present the CCS project details, positioning it as a step towards a “new era” of clean energy job creation. The government expects the project to attract about £8bn in private investments from major global energy players like BP and Equinor. The clusters are predicted to create 4,000 direct jobs and support an additional 50,000 in the longer term.
Despite this, the initiative has sparked opposition from environmentalists. They argue that CCS, which involves capturing carbon emissions from industrial plants and storing them underground, could allow fossil fuel companies to continue operations longer than they should. Greenpeace UK’s Doug Parr voiced concerns that the government's approach could lock the country into "second-rate" solutions, prolonging dependence on fossil fuels like natural gas.
Critics also favor increased funding for renewable energy sources and the production of “green hydrogen,” which is generated from renewable electricity. In contrast, CCS is often used in “blue hydrogen” production, which relies on fossil gas and emits carbon during extraction and transportation.
Still, Miliband defended the plan, calling it crucial for reviving Britain’s industrial heartlands. He pointed out that this investment follows the recent closure of the UK's last coal-fired power station, marking a shift towards cleaner energy alternatives.
Labour’s CCS initiative is part of the party’s wider climate strategy. However, experts like Lorenzo Sani of Carbon Tracker warn that the government’s reliance on outdated cost estimates could lead to a waste of public money.
This latest push for CCS revives efforts first proposed by Labour in 2009, which were later scrapped by the Conservatives in 2015. By bringing the project back to life, Miliband argued, the UK is entering a “new era,” aiming to spearhead clean energy innovation and rebuild the nation’s industrial base sustainably.
