UK Government Inks £2bn Carbon Capture Pact with Italian Oil Giant

Image Credit: ENI

In a bold move to tackle climate change head-on, the UK Government has struck a monumental £2bn deal with Eni, the Italian oil and gas giant, to start constructing a cutting-edge carbon capture and storage (CCS) network in Liverpool Bay. This agreement, which sees the North Sea Transition Authority (NSTA) granting Eni three crucial carbon storage permits, marks a significant step in developing the HyNet North West industrial cluster.

Spanning North Wales and the North West of England, the Liverpool Bay CCS project is set to be a game-changer — not only by helping to mitigate emissions from hard-to-abate industries like cement, waste-to-energy, and hydrogen production but also by creating 2,000 high-skill jobs. New infrastructure will be deployed, helping the UK get closer to its net-zero targets.

Energy Secretary Ed Miliband said: “Today we keep our promise to launch a whole new clean energy industry for our country – CCS – to deliver thousands of highly skilled jobs and revitalise our industrial communities.

“We are making the UK energy secure and backing our engineers, electricians, and welders so we can protect families and businesses and drive jobs through our Plan for Change.”

Notable businesses, including Essar, Cadent, Ineos Inovyn, and Uniper, back the HyNet North West project. As part of a broader strategy, the Labour-led Government has committed to investing up to £21.7bn over the next 25 years into CCS and low-carbon hydrogen technologies. This represents a sizeable increase over the previous Tory-led Government’s £20bn pledge, which was dedicated exclusively to CCS over 20 years.

This massive funding push forms part of the UK’s drive to decarbonize its heavy industries. The HyNet North West project has already garnered attention as one of the first two initiatives to receive financial backing under this scheme. The second initiative, the East Coast Cluster, is also gearing up for implementation.

Yet, despite the ambitious goals and significant investment, the deal has raised eyebrows across Parliament. A parliamentary committee scrutinizing government spending has labeled the £21.7bn commitment as "a gamble," calling into question the actual climate impact and the financial burden it may impose on taxpayers. Critics from the environmental and health sectors have voiced their concerns.

A key point of contention is the increasing prominence of CCS technologies in the UK’s energy strategy. This week, during the UK’s energy security conference, hosted in partnership with the International Energy Agency (IEA) in London, questions were raised about the long-term viability of CCS. While the technology is seen as essential in meeting net-zero emissions targets, critics argue that its hefty costs and potential risks could outweigh the benefits — especially compared to other, possibly more effective solutions.

Oil Change International’s North Sea senior campaigner Rosemary Harris said: “CCS is an extremely expensive failed technology that has a fifty-year record of hot air and hype.

“The HyNet project will do next to nothing for climate, jobs, energy security, or people’s wallets. It also carries huge risks for those who live near the proposed site and the surrounding environment.

“Making CCS a pillar of the Government’s just transition agenda is a huge risk and a missed opportunity to support real, ready-to-go solutions like renewables and energy efficiency that can build lasting jobs and sustainable communities.”

Friends of the Earth climate campaigner Tony Bosworth said: “The Prime Minister rightly recognises that homegrown clean energy is critical for delivering energy security and bringing down bills.

“But rather than pursuing expensive and unproven technologies like CCS, which will do nothing to boost energy security, the Government should be insulating people’s homes – this will save energy, slash bills, and help stop people shivering in heat-leaking homes.”