UK Government Commits £3.9bn To Fund Carbon Capture & Storage Projects Between 2025-2026
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The UK's new government has released its first budget since assuming office over the summer, committing billions to support clean hydrogen subsidies and carbon capture and storage (CCS) infrastructure. Among the key allocations, £3.9 billion has been earmarked for CCS projects between 2025 and 2026. According to the budget, this funding aims to “decarbonise industry, support flexible power generation, and leverage the UK’s geographic and technical advantages.”

The central crux of all initiatives involves the creation of a zero carbon economy especially focused on energy. Earlier in October, the government announced up to £21.7 billion in long-term funding to launch the UK’s initial CCS projects over the next 25 years. This substantial investment is set to facilitate the development of two undersea carbon storage sites and associated pipelines, designed to sequester more than 8.5 million tonnes of CO2 annually. The current budget adds £3.9 billion (approximately USD 5.1 billion or EUR 4.7 billion) for 2025/2026 to advance Carbon Capture, Usage, and Storage (CCUS) Track-1 projects and secure contracts with 11 green hydrogen producers.
Speaking at the Carbon Capture and Storage Association (CCSA) conference in October, Sarah Jones MP, Minister for Industry at the Department for Energy Security and Net Zero and the Department for Business and Trade, underscored the critical importance of carbon capture projects in the UK. " she affirmed, highlighting its essential role in decarbonising industries such as glass and cement. Jones stressed that CCUS is "a necessity, not an option," and pointed out the economic growth prospects that these projects present, aligning with the Industrial Strategy Green Paper's goal of rejuvenating British manufacturing.
Jones also noted the UK’s significant “storage potential” and envisioned the creation of extensive “carbon highways” extending to Europe, suggesting an opportunity to develop an export market for the UK’s expanding CCUS capabilities.
The CCSA conference reflected a widespread sense of optimism regarding CCUS's future. Olivia Powis, CEO of the CCSA, commented on the momentum: "The global ambition to scale up carbon capture projects to meet our net zero targets is evident from the enthusiasm at this year’s CCSA conference."
The Labour government has made clear its full commitment to achieving a net-zero economy. Over the next five years, substantial investment in CCS will position the UK as a global leader in this field. This approach is supported by bipartisan consensus, with both major political parties recognising and committing to the importance of advancing carbon capture initiatives in the coming years. Protea is a UK leader in CCUS technologies with a full section being found on our website at https://www.protea.ltd.uk/carbon-capture-and-storage-ccs.
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