HOPES that a pioneering carbon capture and storage cluster will be developed in Scotland within the next few years have suffered a big setback.

Supporters of plans for the development of a Scottish Cluster hoped to win backing under a UK Government programme to encourage the development of carbon capture and storage facilities as a key element of its net zero drive.

The plan, which would involve storing carbon dioxide emissions from across Scotland in depleted North Sea reservoirs, was endorsed by business leaders and politicians.

However, the Scottish cluster missed out in the race to be chosen for priority support.

Energy minister Greg Hands told Parliament that the Government has chosen two hubs covering Northern England and North Wales for inclusion in the Track -1 programme for schemes that it hopes will be operational by the mid 2020s.

READ MORE: Business leaders urge Boris Johnson to support Scottish carbon capture cluster

Mr Hands said the Scottish Cluster had been chosen to serve as a reserve cluster, noting it met the eligibility criteria and performed to a good standard against the evaluation criteria.

“If government chooses to discontinue engagement with a cluster in Track-1, we can engage with this reserve cluster instead,” he added.

The Scottish cluster will continue to receive support under the Government’s plans to have a second wave of schemes operational by 2030.

The verdict delivered yesterday will likely come as a big disappointment for the Scottish cluster and for supporters who thought it was in pole position to win Track-1 status.

They said Scotland’s North Sea oil and gas heritage made the country an ideal place in which to develop CCS facilities on the scale required to store the huge quantities of emissions that must be dealt with.

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Earlier this month business leaders sent a letter to Boris Johnson urging the UK Government to approve the Scottish Cluster as part of the Track 1 programme.

The letter stated: “Scotland is the most cost-effective place to begin CCS in the UK given the capacity for CO2 storage in the North Sea and the existing oil and gas infrastructure available to repurpose …. there is also a huge opportunity for UK & Scottish oil and gas firms, domestic supply chain companies and our wider economy to harness the skills and expertise of our current workforces to create many sustainable jobs in the coming years and contribute significantly to the net zero ambition. It has cross sector support including that of the Scottish Government.”

The letter was signed by senior representatives of the Aberdeen-based Energy Transition Zone (ETZ), Opportunity North East, CBI Scotland, IoD Scotland, the Net Zero Technology Centre, Scottish Chambers of Commerce, and Aberdeen & Grampian Chamber of Commerce.

The signatories included oil services tycoon Sir Ian Wood, who chairs ETZ

Sir Ian said yesterday: “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.”

The cluster project has developed out of a plan to ship emissions from the St Fergus gas terminal in Aberdeenshire for storage in the Goldeneye reservoir, called the Acorn project.

HeraldScotland: The St Fergus gas terminal Picture: Acorn ProjectThe St Fergus gas terminal Picture: Acorn Project

While the plan was originally developed by a small firm based in Banchory, international investors decided there was enough potential in Acorn to back the acquisition of the firm by a company called Storrega.

This has won backing for the cluster plan from North Sea oil heavyweights Royal Dutch Shell and Harbour Energy and from big corporations that expected to be able to use its facilities to help deal with their emissions, such as Grangemouth refinery owner Ineos.

Storrega chief executive Nick Cooper said yesterday: “Whilst we are disappointed of the outcome of the sequencing bid, we remain convinced of the potential and significant advantages of the Scottish Cluster.”

He added: “The Acorn project will play a significant role in achieving UK Net Zero and will be developed.”

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Five clusters competed for Track 1 funding. The successful East Coast and HyNet North West clusters include so-called Red Wall areas, which switched from Labour to the Conservatives at the last general election.

The East Coast cluster covers Humberside and Teesside. Partners in it include oil and gas giants BP, Equinor, TotalEnergies, and Shell along with SSE. HyNet spans North West England and North Wales. Supporters include Italian oil giant Eni and industrial players such as Unilever.

It had been expected that the Government would reveal which clusters had won Track 1 status from October 25.

Mr Hands provided details of the decision in a written statement to Parliament.

In the Ten Point Plan for a Green industrial revolution published in November last year, the Government promised to provide an extra £200 million of new funding to create two carbon capture clusters by the mid-2020s, with another two set to be created by 2030.