The foundations of a low-carbon economy
For communities built around industry, the road to net zero raises a critical challenge: how do we protect energy-intensive jobs while cutting emissions? Will the factories that anchor local economies survive the transition and can they remain competitive, or will climate ambition mean industrial decline? Carbon capture, utilisation and storage (CCUS) offers a clear and credible answer. Alongside the Climate Change Committee stating that there is no credible route to net zero without CCUS, the strategic economic case is equally strong. It allows the UK to cut emissions without cutting loose the industries, skills and communities that have powered the country for generations. Done right, CCUS protects and creates high-value jobs, keeps manufacturing in Britain, and enables the UK to compete in global markets that are rapidly shifting towards low-carbon products. Over the last year, carbon capture in the UK crossed an important threshold – from promise to delivery. Today, it is being built. Across the UK, five major CCUS projects have reached financial close and are now under construction, driving real activity on real sites, and mobilising domestic supply chains that will shape the UK’s industrial future. This includes two major transport and storage networks – HyNet in the North West and North Wales, and the East Coast Cluster in Teesside. These networks anchor regional CCUS ecosystems, allowing multiple projects to connect, scale and decarbonise together rather than in isolation. Three capture projects have also begun building – Net Zero Teesside Power, Heidelberg Materials’ Padeswood cement works, and Encyclis’ Protos Energy Recovery Facility. Each project will show how CCUS can decarbonise power generation, heavy industry and energy-from-waste sectors. These matter for reasons that go beyond emissions targets. They show how the UK can continue to produce essential materials like cement, deliver a secure power system, and manage waste responsibly while meeting climate goals. As demand for low-carbon products accelerates, CCUS also enables British industry to adapt its business models and strengthen competitiveness in a rapidly changing global economy. Deploying CCUS at pace, therefore, helps ensure the UK retains a resilient, homegrown supply of essential low-carbon materials, reducing reliance on imports at a time of growing uncertainty in the world. Looking forward, the Carbon Capture and Storage Association (CCSA) has demonstrated in its ‘CCUS Delivery Plan Update 2025’, that CCUS is becoming a key component of a strong low-carbon economy. More than 100 CCUS projects are currently in development across the UK and being applied to a wide range of sectors spanning power, industry, hydrogen and waste management. Together, they have the potential to capture around 77 million tonnes of CO2 per year – roughly the equivalent to the emissions of a country the size of Austria. Alongside this, 22 CO2 storage licences are progressing, with licensed sites, predominantly using existing North Sea infrastructure, capable of delivering over 100 million tonnes of storage capacity annually by the mid-2030s.Yet progress has not been uniform. Over the past two years, 27 CCUS projects have been paused or delayed, with over 15 million tonnes per year of planned capture capacity falling out of the pipeline. In many cases, this reflects uncertainty around timelines, allocation processes and future revenue frameworks. It also reflects the loss of UK industrial sites that could have been decarbonised with CCUS, along with the skilled jobs and essential materials they would have continued to provide. This is not a loss of confidence in the technology. UK developers and the government remain committed to CCUS. But maintaining investor confidence in the market framework requires firm progress in 2026. Three-quarters of developers surveyed by the CCSA warn they could consider overseas markets unless ministers provide clear policy direction and a future route to market this year. CCUS is a highly competitive global industry, and that risk is already visible internationally. Mobile capital and governments are moving quickly to secure supply chains, storage access and long term revenue certainty. According to the Global CCS Institute’s Global Status of CCS 2025 report, 77 CCS projects are now operational worldwide, up from 50 the previous year, while the global development pipeline has grown from 628 to 734 facilities – another record year for deployment. Against this backdrop, delay does not pause investment decisions; it displaces them. Recent government action is therefore welcome. Funding committed in last year’s Spending Review to support the build-out of the East Coast Cluster and HyNet, alongside development funding for the next transport and storage networks, the Acorn Project and Viking CCS, represent important steps forward. But this funding, and a clear allocation framework for the next tranche of projects, must now be confirmed at pace. Certainty is essential to safeguard supply chains, retain private capital and prevent investment from flowing abroad. Clear timelines would also give UK manufacturers and contractors the confidence to invest, scale up and increase domestic content across engineering, procurement and construction. Doing so would allow initiatives such as the MNZ/Peak Cluster, backed by public finance from the National Wealth Fund, and critical to decarbonising British cement and lime, to move forward and secure their place in the UK’s industrial future. After years of discussion and planning on CCUS, we now have spades in the ground. But delivery is not a one-off milestone; it is a process. The choices made now will determine whether CCUS becomes a permanent pillar of the UK’s industrial and clean energy future, or remains confined to a handful of early projects. Industry is ready to deliver at scale. What is needed now is pace, clarity and continuity so that today’s progress becomes the foundation of a fully established UK CCUS industry that cuts emissions while delivering energy security, economic growth and long-term jobs together.
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