Scotland's energy sector - unlocking investment: joint business plan

Annex: Industrial and Negative Emissions Technologies

Barriers and actions

Barrier #1: Need for CO2 Transport & Storage Infrastructure

Stakeholders: UK Government;

• Direct government support for offshore Transportation & Storage (T&S) infrastructure for initial investment.
• New economic regulation framework of T&S infrastructure with appropriate risk/return balance.
• Framework for transfer and re-use of assets between current offshore operators and future T&S businesses.

Barrier #2: Need for Incentivisation for Industrial Capture and Fuel Switching

Stakeholders: UK Government;

• Use of auction revenues from certificates to promote deep decarbonisation efforts: fuel switching electricity, hydrogen and CCS.
• Industrial Capture Contracts based on CfD type model.

Barrier #3: Need for Localised Initiatives Related to Blue Hydrogen

Stakeholders: Scottish Government; UK Government; Ofgem;

• Gas transportation rules to allow for localised hydrogen blending.
• Consideration of 100% blue hydrogen heating in areas in proximity to industrial locations.

Barrier #4: Need for Power Generation with Carbon Capture

Stakeholders: UK Government;

• Extend CfD model to power generation with CCS.

Barrier #5: Need for Support for Supply Chain to Develop Solutions

Stakeholders: Scottish Government;

• Clarify supply chain CCS and hydrogen capabilities through joint mapping project.
• Develop consortia to bid for emerging opportunities in/around North Sea.

Barrier #6: Need for Infrastructure to Support Operations

Stakeholders: Scottish Government;

• Review local infrastructure (e.g. rail and harbours) to ensure that it provides adequate access to fabrication sites (e.g. for imported carbon storage.

Barrier #7: Need to develop business models which will encourage negative emission technologies

Stakeholders: Scottish Government; UK Government;

• UKG and SG to consider procuring negative emissions removal units from a portfolio of NET plants to offset part [25-50%] of the public sector emissions inventory.

Results

• Maintaining existing industrial activity in Scotland and providing scope for new types
• Scotland as a leading destination for management of national, UK and global CO2 via disposal and storage through Acorn project and extensions of that.
• Supply chain benefits from transition of oil and gas expertise
• Transfer of jobs and skills from oil and gas sector
• Incentivise technology deployment and drive down costs

Example projects

• Acorn CO₂ T&S and carbon capture plant (Pale Blue Dot) - Enabler for CCS at scale in Scotland. Anticipated it will deliver 340,000T/year of CO2 reductions, and provide infrastructure to deliver 20MT/year of emissions reduction for Scotland / the UK
• ONE Supply Chain Transformation - Delivery of market opportunities to the Scottish supply chain, diversification workshops, and launch of industry challenges in collaboration.
• ONE Energy Transition Zone - Integrated economic development project with focus on land assembly and infrastructure to attract high-value manufacturing for offshore wind and hydrogen. It will support supply chain transformation, test facilities and new skills.
• ONE Hydrogen Aberdeen Vision - A dedicated pipeline from St Fergus to Aberdeen to allow the city to become one of the first UK towns to be heated by hydrogen
• Dreamcatcher Direct Air Capture project (Pale Blue Dot and Carbon Engineering) in North East Scotland