Issued by: Department for Energy Security and Net Zero

New chapter for the UK's clean industry as financial close reached for East Coast Cluster site projects.

• Groundbreaking deals means construction of the UK’s new carbon capture industry will start next year

• investment directly supports 2,000 jobs in the North East, with tens of thousands more across the UK in the coming years and the awarding of £4 billion of supply chain contracts by projects in the East Coast Cluster, driving growth and investment into the region

• Plan for Change set to put more money in people’s pockets, secure home grown energy, and protect billpayers

Thousands of new, skilled jobs will be supported in the North East of England as contracts for the first carbon capture, usage and storage (CCUS) projects in the UK are signed today (10 December).

The East Coast Cluster in Teesside – a project that will capture and store carbon emissions from industries in the region – is now set to start construction in mid-2025, marking the latest milestone in the government’s mission to reignite its industrial heartlands, tackle the climate crisis and turbocharge growth for decades to come.

This investment decision comes less than a week after the launch of the government’s landmark Plan for Change, which aims to drive economic growth and rebuild Britain, and marks a significant step forward in delivering a Mission-led government. Backing the Carbon Capture industry will help reignite industrial heartlands and drive investment in industrial communities such as Teesside.

It follows the government’s £21.7 billion funding commitment (https://www.gov.uk/government/news/government-reignites-industrial-heartlands-10-days-out-from-the-international-investment-summit) to ensure the UK’s vision for CCUS becomes a reality in the UK. Work is set to begin in 2025, with one of the first projects, Net Zero Teesside Power, estimating to deliver secure low-carbon energy capable of powering up to one million homes from 2028.

The deals will unlock £4 billion worth of contracts that will be awarded by projects in the East Coast Cluster to supply chains, supporting UK businesses, driving investment in innovative technology and industries and creating opportunities for local people.

It also brings a major boost for the UK economy, with 2,000 jobs set to be supported in the North East initially and tens of thousands more to be supported across the UK in the coming years as the CCUS industry grows.

Prime Minister, Keir Starmer, said:

"For far too long our industrial heartlands have been held back by 14 years of instability and low-growth. Working people deserve better.

"Today’s investment is proof that this government is taking a different approach by putting growth first and investing in the industries of the future. That means thousands of jobs secured in the North East and across the UK for years to come.

"This is only the start. Our Plan for Change puts more money in working people’s pockets, secures home-grown energy and protects billpayers, so tyrants like Putin can’t attack the living standards of working people again."

Energy Secretary Ed Miliband said:

"The Prime Minister was clear last week – our plan for change is going to put more money in working people’s pockets. Today’s announcement delivers both – new jobs and economic growth.

"This investment launches a new era for clean energy in Britain – boosting energy security, backing industries, and supporting thousands of highly skilled jobs in Teesside and the North East.

"This is the government’s mission to make the UK a clean energy superpower in action – replacing Britain’s energy insecurity with homegrown clean power that rebuilds the strength of our industrial heartlands."

Louise Kingham, SVP Europe and head of country, UK for BP said:

"These projects represent another step forward for BP’s overall investment plans in the UK. They harness the skills, talent and determination of an established industrial region and apply them to the UK’s own energy transition. We’re proud of the potential of these projects to help stimulate economic growth by supporting thousands of jobs and helping UK companies prosper through the vast supply chains involved, while creating the infrastructure to help major industrial companies with their decarbonisation plans."

Alex Grant, SVP and head of country, UK for Equinor said:

"The UK is a key market for Equinor and we have a history of delivering significant energy provision along its East Coast, transitioning from traditional oil and gas demand to include renewables and low carbon options such as CCS and hydrogen. This is a major step for both Equinor and the UK, helping to decarbonise the country’s industrial heartlands and achieve its net zero ambitions whilst providing jobs and supply chain opportunities. We look forward to working with the new government to deliver further low carbon projects across the UK."

Arnaud Le Foll, SVP New Business – Carbon Neutrality, for TotalEnergies said:

"We are very pleased to be a part of this significant moment in the development of the UK’s CCS industry. Northern Endurance Partnership is a frontrunner project, and we look forward to transporting and permanently storing CO2 from one of the UK’s largest industrial regions. Our stake in Northern Endurance Partnership contributes to TotalEnergies’ objective to develop significant CO2 storage capacities in the North Sea, where we can leverage our expertise in operations and geosciences."

By signing these contracts with industry, the government is proving that its world-leading CCUS business models – developed over years in collaboration with industry – are delivering real results by attracting investment and getting this game-changing technology off the ground.

Building on the success of the flagship Contracts for Difference scheme, which drove the rapid growth of the UK’s offshore wind industry, these models showcase the UK’s ability to create innovative solutions to address the challenges of achieving net zero.

CCUS is a proven technology that captures carbon dioxide emissions before they reach the atmosphere – storing them safely and permanently deep beneath the seabed and preventing their contribution to climate change.

This announcement comes as the North Sea Transition Authority (NSTA) awards the first-ever carbon storage permit to the Endurance store. It also marks a significant milestone as Ofgem takes over as the regulator for the CCUS economic licence, overseeing the construction of the country’s first-of-a-kind CCUS Network. The Low Carbon Contracts Company (LCCC) will also play a vital role as counterparty to the CCUS business models – the Dispatchable Power Agreement and the Revenue Support Agreement.

Stuart Payne, North Sea Transition Authority (NSTA) Chief Executive, said:

"This is a truly historic day. Carbon storage has been long planned but is now becoming a reality.

"For a long time we have talked about the possibility of carbon storage; we have often touted the UK’s vast geographic potential of 78GT, we have drawn up plans for a carbon storage economy and we have grasped the prospect of new jobs. Now we are making it happen.

"The energy industry already has the infrastructure, a world class supply chain and highly-skilled people who can drive the change we need to maintain a thriving energy sector which offers quality jobs and leads the way to net zero. Now let’s put them to work."

Neil McDermott, CEO of the Low Carbon Contracts Company, said:

"The Low Carbon Contracts Company has been working closely with the Department for Energy Security and Net Zero to develop and implement this first of a kind scheme to accelerate towards our Net Zero goals.

"This contract signing marks a key milestone as we expand our critical role beyond renewable energy into carbon capture usage and storage. The East Coast Cluster will bring together communities, industry and academia to deliver the CCS infrastructure needed to further decarbonise our electricity mix.

"We are looking forward to working with our stakeholders on implementing this and wider decarbonisation schemes that not only help accelerate towards Net Zero but play a vital role in growing our economy and providing future careers in innovative technologies."

Beatrice Filkin, Ofgem Director of Major Projects, said:

"This is an important milestone in the drive towards net zero and Ofgem will play a pivotal role in ensuring that networks such as the East Coast Cluster can transport and store carbon dioxide as efficiently as possible.

"While this is a first-of-its-kind venture in the UK, Ofgem will draw upon 30 years of experience regulating the energy market to ensure that both industry and customers see good value for money from operators of the transport and storage network.

"The economic model that has been set out today provides long-term certainty for investors in the network and creates incentives to build the infrastructure the UK needs, at a competitive cost."

Notes to editors

The £4 billion figure does not relate to government funding – it represents the approximate value of contracts awarded by East Coast Cluster to its contractors, to build the two projects. There is a voluntary industry ambition for at least 60% of the supply chain to be based in the UK.

BP will provide operating services to Net Zero Teesside Power and holds a 75% stake in the project, while Equinor holds 25%. BP will also provide operating services to North Endurance Partnership and has a 45% stake in the project, alongside Equinor which holds a 45% stake and TotalEnergies which has a 10% stake.

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