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United Kingdom

Brief description:

ENERGY & CLIMATE CHANGE - POLICY AND PROGRESS

Background

The UK ratified the Kyoto Protocol in May 2002 and gave its commitment to reduce greenhouse gas emissions to 12.5% below base-year levels between 2008 and 2012. It submitted its fifth and most recent UNFCCC national communication in 2009. Between 1990 and 2007, data shows that the UK had driven down total GHG emissions by 18.4%. This is thought to be the result of energy sector restructuring, pollution control measures and other low-carbon policies. According to the UK government, further actions mean emissions will be well below levels needed to meet first-period targets.

The UK’s net CO2 emissions in 1990 were 594.2 million tonnes compared with 544.6 Mt in 2007, a decrease of 8.3%. The highest emitter continues to be the energy sector, and energy consumption increased by 22% between 1990 and 2007. However, emissions from power stations fell by 13% in the same period – due mainly to a switch from coal to gas coupled with enhanced nuclear energy and an increased use of renewable energy.

In 2007, energy supply accounted for 39.7% of net CO2 emissions. The energy mix incorporates coal, petroleum, natural gas, nuclear power and renewables. Emissions from agriculture, forestry and land-use, waste and industrial processes have all decreased between 1990 and 2007. Transport is responsible for around 21% of the UK’s GHG emissions, an increase from 16% in 1990.

An overview of annual GHG and CO2 emissions every year between 1990 and 2009 is provided in this table. A detailed breakdown of emissions by GHG and sector is given in the UK’s fifth UNFCCC national communication.

The UK already has statutory reporting requirements under its Energy Act 2010 which requires the government to report on progress on decarbonising the electricity system and on the development and use of CCS.

Issues and challenges

Despite natural gas currently supplying most of the country’s energy needs, the growth in gas-fired power generation has slowed. It is likely that the UK will need around 30 to 35GW of new electricity generation capacity over the next two decades and around two thirds of this capacity by 2020. This will result in increased emissions unless low-carbon solutions are pursued.

The UK continues to be an important producer of oil and gas, though reserves are in decline. The UK became a net importer of gas in 2004 and a net importer of oil in 2005. Energy supply and security is therefore a chief concern.

The population is rising steadily – it was 61 million in 2007 – a pattern set to continue well beyond 2030, and bringing with it an increase in energy demand.

The climate in the British Isles is generally cool with variable temperatures and moderate seasonal changes. However, mean temperature has increased by 1% since 1980, and summers in the south of the UK are becoming hotter and drier. The UK has also been experiencing increased flooding in some areas and an increase in severe windstorms. The climate is expected to get warmer, with hotter and drier summers and milder, wetter winters. Sea level rise is a major concern for low-lying coastal areas.

In 2008, the UK government launched its Adapting to Climate Change programme, which continues to provide information on how climate change is likely to affect different regions and advice on how organisations can adapt. Its website also gives details on government initiatives and actions. Climate change is expected to have an impact on, among other issues and depending on region, health, lifestyle, transport, infrastructure, tourism and biodiversity.

The UK's independent Committee on Climate Change issued its 2011 progress report on 30 June. In its key findings - including that the UK's emissions increased by 3% during last year - it states that funding for the first CCS demonstration project (i.e. Longannet) is an urgent priority if it is to be online in the 2020s. A final decision is still awaited.

Policy and commitments

In 2008, the government introduced the Climate Change Act, with binding emission reduction target of at least 80 per cent by 2050 relative to 1990 levels. The government strongly recognises the need to substantially decarbonise the power sector and that CCS has great potential. In 2009, the government stated that new fossil fuel power stations over 300MW would have to be designed carbon capture ready. A consultation White Paper indicates that new gas plants will be required to be built carbon capture ready, if approved.

Legislation relating to specific tax relief for CCS will be introduced in the 2012 Finance Bill.

The UK government's Department of Energy and Climate Change (DECC) is responsible for national and international measures to mitigate and adapt to the effects of climate change. However, the desire to fast-track CCS as a major part of tackling emissions may yet be undermined by the fall-out from the recent global financial crisis. For key CCS projects to go ahead, UK policy and funding will need to co-ordinate with the European Union’s NER300 funding programme, which announces its awards in the second half of 2012.

In May 2011, the government announced ambitious plans to cut carbon emissions in half by 2027. With the ultimate goal of an 80% cut by 2050, the UK is legislating a 50% emissions reduction by 2027. It also stated its aim to protect energy-intensive industries while measures towards deep cuts in the 2020s were implemented - including a move to invest in 20-30GW of low-carbon capacity, including CCS, renewables and nuclear. The exact proposal for reaching the 2027 target is due in October 2011.

The task of creating the right conditions and legislation for CCS to be successfully deployed in the UK lies with DECC’s Office of Carbon Capture (OCCS). The delivery of the UK’s CCS demonstration strategy is largely the responsibility of OCCS, which is developing a CCS Roadmap.

Since the UK’s fourth report to the UNFCCC in 2006, the government has brought in a number of climate change policies and measures. For example, the Environmental Transformation Fund (ETF), which began in 2008, is intended to promote R&D into low-carbon energy and energy-efficient technologies. The fund also has an international element – it is jointly owned by DECC and the Department for International Development and administered by the World Bank.

The CRC Energy Efficiency Scheme came into force in April 2010 under the Climate Change Act 2008. The cap-and-trade scheme applies to large-scale businesses and public sector organisations and is expected to cut CO2 emissions by at least 1.2 Mt per year by 2020.

Under the new EU Renewable Energy Directive, the UK government has given a commitment to source 15 per cent of the country’s energy consumption from renewable sources by 2020. Other initiatives include the £1billion research and policy programme, Living With Environmental Change, and the establishment of the Energy Technologies Institute, involving government and industry and with funding of around £1 billion over ten years.

An Electricity Market Reform consultation was launched in December 2010, which includes proposals to set emissions performance standards (EPS) for all new fossil fuel power stations. However, plans to instil EPS within new legislation will not go ahead as expected, but may yet be introduced in a second energy bill. This development has troubled environmental organisations and advocates of CCS, who are concerned about a continued lack of clear targets for decarbonising the energy sector.

Scotland

The Scottish Government has stated its full support for CCS as a technology that can significantly reduce emissions and contribute to economic growth. It is also working with the UK government to promote the safe storage of CO2 in the UK offshore area. It announced its policy on CCS in November 2009, stating that any new coal plant must include CCS on a minimum of 300MW from start-up. More details on its CCS stance and actions here.

Regulatory framework

The need for a regulatory framework to promote and manage CCS in the UK has been identified as an important step towards its deployment, and the UK is recognised as one of the world leaders in developing such a framework. In 2008, the UK’s Climate Change Act came into force, with legally binding targets to achieve an 80% reduction in GHGs by 2050. It set up the Committee on Climate Change, tasked with enabling GHG reductions by 2020 and 2050. Read the Act here.

The UK, as part of the European Union, must establish laws and regulations demanded by *CCS directive, EU 2009/31/CE, by 25 June 2011. The government is currently finalising a number of regulations, in line with the directive, including a long-term CO2 storage liability regime. Read more about the UK’s legislative changes in the IEA’s CCS legal review, May 2011.

*The CCS directive is part of the EU's climate change package that recognises the need for developed nations to reduce GHG emissions by 30% by 2020, and between 60% and 80% by 2050. First estimates suggest up to 160 million tonnes of CO2 could be stored by 2030 – or 15% of required reductions.

In October 2010, the UK government published draft National Policy Statements (NPS) as part of moves to allow for realistic investment in low-carbon technologies. Within the NPS there is an emphasis on CCS and a requirement for fossil fuel power stations of at least 300MW capacity to be carbon-capture ready. Consultation is still under way. In Scotland, this is dealt with in the National Planning Framework 2.

Consultation on proposed amendments to onshore and offshore pipeline safety regulation, including those carrying CO2, ended in March 2011. Results are now being analysed by the Health and Safety Executive.

In progress

A new Energy Bill is currently going through the UK parliament. When passed, it will provide the framework for making homes and businesses more energy efficient and securing low-carbon sources of energy. Find out more about the Energy Bill here.

Scotland

The Scottish Government is a major protagonist of CCS as a key route to significantly reducing CO2 emissions and promoting economic growth. It continues to back R&D into CCS technologies and has funded extensive research into Scotland’s offshore storage potential and the development of relevant regulatory frameworks. The Climate Change (Scotland) Act 2009 is the most far-reaching environmental legislation brought in by the Scottish Parliament. It has set an ambitious target of reducing GHGs by 42% by 2020, and an 80% reduction by 2050 – in line with the rest of the UK.

In 2009, the Scottish Government formed a regulatory group to consider the permits required across the entire chain of CCS activities. The group has since been ensuring that legislation in Scotland meets the requirements of the EU CCS Directive.

In August 2010, the group tested the regulatory system by taking a CCS project application through every stage of the approval process. In conjunction with the Scottish Centre for Carbon Storage, the government then published a CCS Regulatory Test Toolkit – this has since been endorsed by the European Commission as a model of best practice for other EU member states.

CCS initiatives and funding

Two successive UK governments have shown a clear commitment to CCS with their intention to fund four commercial-scale CCS demonstration projects by 2014. The first stage of the competition, first announced in 2007 and confirmed by a new government in 2010, had one remaining finalist –Longannet – for the ₤1 billion grant on offer. However, negotiations between the government and the Longannet partners broke down in late 2011, effectively killing off the UK’s flagship CCS project. Peterhead has now emerged as a lead contender for funding from the CCS competition, with the government remaining committed to providing public funding for four CCS demonstration plants - which could include, since May 2010, gas as well as coal-fired power stations. In March 2011, the UK government decided not to proceed with a CCS levy, but instead to fund its CCS commitments from general taxation. More details on the UK’s demonstration programme here.

Regional development agency Yorkshire Forward outlined its vision for a shared CCS network in 2008 in its report, A Carbon Capture and Storage Network for Yorkshire and Humber. Through its wholly-owned company CO2Sense, it is working with industry, investors and government to develop plans for a large-scale CO2 transport network - or CCS cluster - in the Yorkshire and Humber region of the UK. The network could capture at least 90% of the CO2 produced by the region's conventional power stations and heavy industry, for storage in depleted gas fields and saline formations under the southern North Sea. CO2Sense believes a CCS cluster in the region could reduce the UK’s total current CO2 emissions by around 10%.

The Tees Valley Industrial Programme (TVIP) is a £60m investment – backed by the DECC - between 2009 and 2012 to fast-track new opportunities in the region for low carbon and advanced manufacturing. In August 2010, Progressive Energy and Rio Tinto Alcan’s plans for CCS projects in the north east of the UK were awarded grants from the TVIP. See North East CCS Cluster below for project details or this link for more about TVIP.

National Grid, the manager of Britain’s natural gas-delivery network, is looking into the use of its existing grid of gas pipelines to transport CO2 for eventual offshore storage, including 300 km of pipelines in Scotland, as well as old and new pipelines in the Thames Valley and Yorkshire areas. Its subsidiary, National Grid Carbon, has been created to develop the infrastructure needed.

CCS projects

A number of CCS projects are making progress within the UK, either at the feasibility, design or pilot testing stages, or undergoing public consultation and/or seeking necessary approvals. Longannet, in Scotland, is expected to secure funding from the UK government’s first round CCS competition while others, including the renamed Don Valley in the north east of England, are hoping to be successful within the second round competition.

The UK submitted seven CCS projects to the EU’s NER300 programme – a €4.5 billion fund to support CCS and renewables projects across the European Union. Longannet, Hunterston, Drax, Killingholme, Don Valley, Peterhead and Progressive Energy’s Teeside bid (see NE Cluster) must wait until mid-2012 to see if they will outbid another six CCS projects from other EU member states.

For more information on the UK’s current CCS projects, follow the links below.

Storage potential

The North Sea off the UK’s east coast – and, in particular, off Scotland and the north east of England – offers the greatest potential for long-term storage of captured CO2, either within depleted oil and gas reservoirs or for use in EOR projects. The Scottish Centre for Carbon Capture (SCCC) published its Opportunities for CO2 Storage around Scotland report in 2009, followed by a detailed analysis of sites in 2011. These reports show that the geology below the Moray Firth in the north of Scotland could potentially store decades worth of CO2 captured from Scotland’s coal-fired power stations, such as Longannet in Fife. The technology could also provide a massive jobs boost by 2020.

In 2008, the Scottish Government introduced legislation to allow the introduction of a common UK framework for carbon capture and storage. As a result, Scotland will license storage activity out to 12 nautical miles, but the UK government will have to consult the Scottish assembly for all licences between 12 and 200 nautical miles within Scottish waters.

The Yorkshire Forward initiative is exploring potential storage sites below the southern North Sea – also targeting depleted oil and gas reservoirs and the possibility of selling captured CO2 for use in EOR projects. Its wholly-owned company CO2Sense and National Grid Carbon are developing plans for a CCS transport-and-storage hub within the region.

In March 2011, a CO2 storage study by Eunomia - commissioned by Scotland's Hunterston project partners - identified depleted gas fields below the East Irish Sea, which could potentially be used to store over 1 billion tonnes of CO2 emissions from the UK and Ireland. Eunomia's report, The East Irish Sea CCS Cluster: A Conceptual Design, highlighted storage capacity within the Liverpool Bay and Morecambe Bay natural gas fields as the means to decarbonise the industrial areas on the west of mainland UK.

International co-operation

The UK is a leading CCS player internationally, through its ambitious national programme and its involvement in a number of key fora and agreements.

The government is working with the EU Commission to ensure that the development of CCS in the UK meets European ambitions to have up to 12 CCS demonstration projects in place by 2015.

The UK is also part of the Zero Emissions Platform (ZEP), a coalition of stakeholders set up in 2005 to promote CCS as a key technology for combating climate change. ZEP is also an advisor to the European Commission on the research, demonstration and deployment of CCS.

The UK is part of the EU-China NZEC (near zero emissions coal) agreement, announced at an EU-China Summit in 2005. This aims to develop and demonstrate CCS in China and Europe, with partners agreeing to develop and demonstrate advanced coal technologies through CCS by 2020. In 2009, the UK and China supported an accelerated timescale of 2015 for an operational plant.

The UK is part of the Carbon Sequestration Leadership Forum, an international climate change initiative focusing on the development of economically viable CCS technologies.

The North Sea Basin Task Force was set up by the UK and Norway in 2005 to develop shared principles for regulating and managing CO2 storage below the North Sea. Members from industry and government represent both countries along with Germany and the Netherlands. The Four Kingdoms initiative was set up by the UK, Norway, the Netherlands and Saudi Arabia in 2008, as a way for the oil producing nations to collaborate on the development and deployment of CCS.

The National Centre for CCS in South Africa was launched in 2009, with part funding from the UK's DECC. The centre conducted a study of the potential for CCS in South Africa in 2004 and published a CO2 storage atlas to assess potential storage sites in 2010. The DECC is now funding an assessment of the onshore Durban/Zululand basin, as candidate for a test injection.

In India, the DECC has provided funding for capacity building CCS projects, such as an international workshop on CCS in the power sector and a regional study by the British Geological Survey of potential storage sites. An assessment of the potential to develop CCs in Indonesia was part-funded by the UK, and the results were launched at a joint event with the IEA and the Asia-Pacific Economic Cooperation in Jakarta in 2009.