Climate change monitoring report 2023

Climate Change Plan Monitoring Report 2023: Negative Emissions Technologies (NETs)

Part A - Overview of sector

Negative Emissions Technologies (NETs) are yet to be deployed in Scotland as they rely on carbon capture and storage (CCS) to deliver negative emissions. Whilst some technologies that could deliver negative emissions are currently deployed, such as energy from waste, these facilities would require retrofitting with carbon capture technology and a route to storage to be considered a negative emissions technology.

The CCPu includes policies and proposals for supporting and enabling early deployment from 2029 onwards. We currently do not track progress against the NETs envelope in the CCPu. However, once we have clarity on the UK Government’s support to deliver CCS in Scotland and the outcomes of our NETs Feasibility Study, we will provide a comparison of progress towards delivering NETs against the envelope as laid out in the CCPu.

The CCPu sets out the following policy outcomes for the sector. Given that this sector chapter appeared first in the CCPu (2020), there are no indicators for these outcomes. In the next CCP we will update the policy outcomes and include indicators to track progress against these updated outcomes.

Detailed feasibility study on NETs will assess the opportunities for negative emissions in Scotland, and identify applications with the greatest potential, including specific sites where possible

CCUS: the continued development of CCUS technologies and systems is prioritised to ensure these can be rolled out commercially and at scale by the late 2020s.

Bioenergy: a cross-sectoral approach for the appropriate and sustainable use of biomass in energy applications is agreed and implemented (taking into account competing land and feedstock uses).

Just transition and cross economy impacts

We wish to understand and report on the broader just transition and cross-economy impacts of our emissions-reduction activities in addition to these sector specific policy outcomes and indicators. To do this, in this report we use data from the Office of National Statistics (ONS): Low Carbon Renewable Energy Economy (LCREE) publication. The LCREE data presented in this report is based on survey data of businesses which perform economic activities that deliver goods and services that are likely to help generate lower emissions of greenhouse gases, for example low carbon electricity, low emission vehicles and low carbon services.

The LCREE indicator is narrowly defined and, while useful within its limited scope, does not give us the full picture of the impacts on workforce, employers and communities and progress towards a just transition.

Over the next few years we will work to develop a more meaningful set of success outcomes and indicators aimed at tracking the impacts of our policies on a just transition to net zero.

Sector commentary on progress

The CCPu included Negative Emissions Technologies (NETs) as a sector chapter for the first time, recognising the important role that emissions removals will need to play in reaching net zero, as highlighted by the IPCC Working Group 3 report. The ‘learning by doing’ approach set out in the CCPu more widely was also identified as being particularly important in the case of this sector, given the considerable uncertainties around technological development and dependencies on UK Government action, particularly with regard to carbon capture and storage.

Policies included in the NETs chapter recognised these challenges and uncertainties and sought to develop an evidence base to allow for further policy development. We have now undertaken an initial review of evidence.

The review indicates that NETs in Scotland can deliver at scale in due course but not at the pace assumed in the CCPu. This is due to various shifts in evidence since the time of the CCPu, including:

• The UK Government’s decision not to allocate the Scottish Cluster as a Track-1 cluster for delivery in the mid-2020s, impacting on when carbon storage underpinning NETs will be available, and industries’ appetite to invest in NETs technologies. We have urged the UK Government to accelerate the Scottish Cluster to full Track-1 status without delay and provide urgent clarity on the next stages of the cluster sequencing process, setting out a clear and accelerated timeframe for Track 2. While the UK Government’s Powering Up Britain announcements on 30 March reconfirming their commitment to four CCUS clusters by 2030, highlighting Acorn as one of two projects “best placed to deliver on Government objectives for Track-2” and starting the Track 2 process are positive developments, only eight out of 20 shortlisted and 41 initially eligible Phase 2 projects were taken forward to the negotiation stage (and this did not include any projects from the Humber region of the East Coast Cluster), suggesting a weakening of progress. No NETs projects are included in this list. They also did not provide a clear timeline for Track 2, merely confirming that they “intend to provide an update in the summer, following the closure of the expression of interest process”. We continue to call for further clarity on Scottish Cluster deployment timelines.
• The availability of home grown sustainable biomass to supply large scale power bioenergy with CCS (BECCS); and
• No public commitment to date by a commercial operator to employ a NETs model for a single large power station in Scotland. Given lead in times for development of such a facility and proposals for CCS deployment for the Peterhead CCGT power project, it is unlikely that a new NETs power facility will be developed in the 2020s.

We are now gaining further knowledge and evidence of what scale of NETs can be delivered in Scotland and to what timescale, through undertaking a NETs feasibility study. This further evidence will be worked up over 2023 and will be considered as we develop ESJTP and next full CCP.

Developments in monitoring arrangements since last report:

No changes.

Part B - Progress to Policy Outcome Indicators

Policy Outcome: Cross-sectoral social and economic

Indicator: FTE employment in Low Carbon Renewable Energy Economy Indicator

On-Track Assessment (Milestones/Targets): Year-to-year change

Most Recent Data: 2021

Data Source(s): Office of National Statistics: Low Carbon Renewable Energy Economy (LCREE), Time spent of Green Tasks

Assessment: Too Early to Say

Commentary:

In 2021, the Scottish low carbon renewable energy (LCREE) sectors were estimated to provide 28,300 jobs^[38].

• The estimates of LCREE are based on a relative small sample of businesses and hence are subject to a wide confidence interval. Scottish LCREE employment in 2021 is substantially higher than previous years but the difference is not statistically higher than 2020.

Employment in Low Carbon Renewable Energy Economy, FTE^[39]

• LCREE only shows employment in roles in industries directly involved in the transition to Net Zero. This means that possible CCUS-related activity carried out by firms in sectors not targeted by the survey might be missed and statistics on jobs may undercount the economy's actual labour allocation to these activities.
• The ONS also released experimental statistics on a wider perspective of green activity in the economy with their time spent on green tasks release.
• These statistics reflect green activities in both LCREE and non-LCREE sectors. The 2023 publication has not yet been published.

Part C- Information on implementation of individual policies

Outcome 1: Detailed feasibility studies on NETs will assess the opportunities for negative emissions in Scotland, and identify applications with the greatest potential, including specific sites where possible.

Policy

In 2021/22 carry out a detailed feasibility study of opportunities for developing NETs in Scotland ready for the early 2030s. This will identify specific sites and applications of NETs, including developing work to support policy on Direct Air Capture and its role within NETs in our future energy system

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Studies to build our evidence on NETs and inform the scope of a detailed feasibility study have been commissioned and published within 2021/22. These outputs include research on bioenergy feedstock availability (Available here) and a horizon scan of international deployment of NETs (Available here).

A detailed feasibility study has been scoped and is currently underway.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The feasibility study research is underway.

The final report containing recommendations to government and proposed NETs implementation pathways is expected in Summer 2023.

Policy

From 2022, based on the outcomes of the feasibility work, we will provide support for commercial partners to develop NETs proposals.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We have continued to build our evidence of NETs feasibility through studies on bioenergy feedstock availability and international NETs deployment. This work will be bolstered by a detailed feasibility study that is now underway.

We are simultaneously identifying and engaging with those key stakeholders which have the ability to implement NETs in Scotland to better understand the support that the Scottish Government may be able to offer.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Initiated in 2022 supported by the EETF.

Timeframe and expected next steps

Work on a feasibility study is underway. This work is expected to report by May 2023.

As evidence on NETs accrues via the feasibility study and further stakeholder engagement throughout 2023, we will begin to formulate support measures for commercial partners and these will be outlined in the next CCP.

Policy

Put in place a continual process to review the development of NETs and progress against its envelope.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

This is assured by internal governance boards.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Timing and arrangements to be confirmed in the next CCP.

Policy

We will work with UK

Government to ensure that they bring forward suitable mechanisms to support the development of NETs business cases in relevant sectors.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Recognising that many NETs support mechanisms are reserved to the UK Government, we are working with relevant departments, including DESNZ, to ensure support for prospective NETs developers in Scotland.

In particular, and following the outcome of the UK government’s cluster sequencing process in which it failed to award the Scottish CCS cluster track 1 status, we have championed the timely deployment of Scottish CCS infrastructure as being essential to enabling development of NETs.

Work with the UK has further involved engaging with relevant consultations. In March 2021 we responded to the Call for Evidence on greenhouse gas removals (GGRs), Scottish Government response to UK Government Engineered Greenhouse Gas Removals Business Models consultation submitted in October 2022.

Through our role as part of the ETS Authority (which comprises of the UK Government and the three Devolved Administrations) we ran a consultation in 2022 on changes to the Emissions Trading Scheme. This included a Call for Evidence on the inclusion of greenhouse gas removals (GGRs) in the ETS.

Timeframe and expected next steps

We will continue working with UK Government to foster the necessary support for NETs in Scotland.

The UK Government recently opened the expression of interest process for Track 2 CCUS clusters but we continue to urge them to provide a timetabled solution for Track-2 clusters will be awarded and will continue to promote the rapid deployment of the Scottish cluster as being essential to both Scottish and UK NETs ambitions.

We will continue to take forward work with the rest of the ETS Authority on the potential inclusion of GGRs in the UK ETS.

Outcome 2: CCUS: the continued development of CCUS technologies and systems is prioritised to ensure these can be rolled out commercially and at scale by the late 2020s.

Policy

Support the development of NETs technologies within Scotland.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

This has been significantly impacted by the UK Government decision on the CCUS cluster, as discussed in Part A. £80m funding has been made available via the Emerging Energy Technologies Fund to enable the Scottish CCUS cluster to continue and accelerate the deployment of carbon capture technology

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

£80m funding has been made available via the Emerging Energy Technologies Fund to enable the Scottish CCUS cluster to continue and accelerate the deployment of carbon capture technology.

Policy

Support the inclusion of NETs in the development of strategic, industry lead pathways for CCUS infrastructure in Scotland.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

This has been significantly impacted by the UK Government decision on the CCUS cluster, as discussed in Part A.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

N/A

Policy

Funding through the Scottish Industrial Energy Transformation Fund to consider the development of NETs demonstrators.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

NETs demonstrators to be considered for inclusion in subsequent calls of SIETF.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

As for SIETF

Timeframe and expected next steps

As for SIETF

Policy

Provide a focus on integrating NETs projects with CCS infrastructure through the Emerging Technologies Fund.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

This has been significantly impacted by the UK Government decision on the CCUS cluster, as discussed in Part A. £80m funding has been made available via the Emerging Energy Technologies Fund to enable the Scottish CCUS cluster to continue and accelerate the deployment of carbon capture technology.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

£80m funding has been made available via the Emerging Energy Technologies Fund to enable the Scottish CCUS cluster to continue and accelerate the deployment of carbon capture technology.

Outcome 3: Bioenergy: a cross-sectoral approach for the appropriate and sustainable use of biomass in energy applications is agreed and implemented (taking into account competing land and feedstock uses).

Policy

We will publish a Bioenergy Update in early 2021, laying out our current position and understanding of the role of bioenergy in the energy system and setting out in more detail how we will move forward.

Date

CCPu 2020

Progress on implementation since time of last report / CCPu

We published the Bioenergy Update on 24 March 2021

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

We published the Bioenergy Update on 24 March 2021.

Policy

In 2021, building on the Bioenergy Update, we will establish a cross sectoral Bioenergy Expert Working Group to consider and identify the most appropriate and sustainable use for bioenergy resources across Scotland. It will also assess the volume of bioenergy resources that we can grow or produce within Scotland, and confirm the level of import that we believe is compatible with a sustainable global trade in bioenergy.

Date

CCPu 2020

Progress on implementation since time of last report / CCPu

We have published research which forecast the availability of domestic bioresources out until 2045.

We will consider the impacts and interactions of increasing biomass production on existing agricultural land.

Following publication of the draft Bioenergy Action Plan, we will establish an expert panel to review policy and suggest routes for developing the bioenergy sector.

Timeframe and expected next steps

Ongoing meetings of the working group over the next 24 months. Gathering evidence and sharing knowledge across multiple sectors.

Engagement with UK Government in the lead up to their Biomass Strategy due to be published in 2023.

Policy

By 2023, in time to inform the next CCP, we will publish a draft Bioenergy Action Plan, incorporating the learning developed by the expert working group and our understanding of the options to use Bioenergy in both NETs and other applications.

Date

CCPu 2020

Progress on implementation since time of last report / CCPu

See above – we will publish a draft Bioenergy Action Plan in advance of the next draft CCP.

Following publication of the draft Bioenergy Action Plan, we will establish an expert panel to review policy and suggest routes for developing the bioenergy sector.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

See above

Timeframe and expected next steps

To be developed from the findings and recommendations from the Working Group.

Following publication of the draft Bioenergy Action Plan, we will establish an expert panel to review policy and suggest routes for developing the bioenergy sector.