The Scottish Cluster, led by a cross-sector group of Scottish industrial CO2 emitters and the Acorn Carbon Capture and Storage (“CCS”) and Hydrogen Project Partners, today publishes the key findings of a report on the employment impact of the Scottish Cluster in Scotland. The report was commissioned by Storegga, the lead developer of the Acorn CCS and Hydrogen Project on behalf of the Scottish Cluster and was conducted by the strategic energy consultancy Element Energy. 

Report highlights:        

• The Scottish Cluster, by deploying CCS, hydrogen and Direct Air Capture (“DAC”) technologies in Scotland, could support an average of 15,100 jobs between 2022-2050, comprising 6,200 direct jobs and 8,900 supply chain jobs.
• Total Scottish Cluster jobs are expected to peak at 20,600 in 2031
• The Cluster is bidding to be part of the UK Government’s CCS track 1 cluster programme, and would start supporting jobs as early as 2022
• Hydrogen production with an expected capacity of 3.7GW by the mid 2030’s will account for the highest proportion of the direct and indirect jobs supported by the Scottish Cluster
• The project is critical to enable and accelerate low-carbon hydrogen deployment
• The project build phase, between 2022 and 2036, will account for over 60% of the total jobs supported by the Scottish Cluster
• Infrastructure repurposing from the oil and gas industry reduces the cost and time involved in establishing a CO2 transport and storage system, positioning Scotland as a key region to establish this CCS and hydrogen hub to help provide an opportunity for industrial areas across the UK to be able to access CO2 storage before 2030

The Scottish Cluster will enable carbon capture deployment across a diverse set of emitters and a robust and resilient multi-option CO2 transport and storage system. Investment decisions could commence in early 2023, leading to commissioning from 2025, capture of 6.7 million tonnes per annum (“Mtpa”) of CO2 by 2030, and over 23Mtpa in the longer term.

Between 2025 and 2030 the Cluster should include nine different UK CO2 sources, spanning a variety of high emitting sectors including industrial sites and power generation plants, as well as new hydrogen generation plant and the deployment of Direct Air Capture (“DAC”) technology. Eight of these CO2 sources should be operational by 2027 and they include two of the gas terminals at the St Fergus Gas Complex, SSE and Equinor’s Peterhead Carbon Capture Power Station, around 1 million tonnes per year from the INEOS and Petroineos sites at Grangemouth and the first large-scale DAC facility of its kind in Europe, targeted for North East Scotland.

Domestic and international shipping customers will be welcome from the start, with Peterhead Port reception facilities being commissioned in 2026 with around 3Mt/pa of domestic CO2 shipping expected by 2030 and CO2 from ship imports through Peterhead Port ultimately expected to exceed 9Mtpa. The Cluster plans for a significant expansion after 2030, driven largely by CO2 shipping customers and the expansion of the local DAC and hydrogen projects. Overall, the Scottish Cluster is expecting to cumulatively capture and store 25.5 Mt of CO2 by 2030 and nearly half a Gigatonne (500Mt) by 2050.

By 2050, it is anticipated that the Scottish Cluster will expand further. The current risked view is that approximately 30Mtpa could be handled by onshore and offshore transport and storage by 2050. The infrastructure expansion required to provide additional capture and/or storage capacity would continue to add jobs and Gross Added Value (“GVA”) in Scotland, whilst also facilitating further UK decarbonisation projects and safeguarding industrial jobs elsewhere.

The Scottish Cluster will create, safeguard and continue to support tens of thousands of high skill jobs. High value jobs created will include:
retail trade services; management consulting services; insurance services; real estate services; accounting services; electricity services; machinery and equipment services; and industrial gas and inorganic chemical services.

High value jobs safeguarded will include:

• cement, lime, plastering; mining support services and gas distribution supply.

High value jobs will continue to be supported in:

• engineering services, construction services, scientific and technical services, architectural services and other industry and construction support activities such as electrical equipment; and basic materials and casting.
• Converting the UK to a hydrogen economy will be a critical element of the UK meetings its net zero by 2050 target. Hydrogen can be blended to 20% of the natural gas grid before household boilers need to be changed. 35% of the UK’s natural gas comes onshore at St Fergus. Blue hydrogen will be produced from the natural gas with the CO2 created being captured and stored.

The project is critical to enable and accelerate low-carbon hydrogen deployment. Without the Scottish Cluster, hydrogen uptake among the Scottish sectors could be significantly delayed. This could affect the timeline for the decarbonisation of the Scottish industrial, heat, and transport sectors. The attainment of the deep decarbonisation pathways for Scottish industries would also likely be affected. The Scottish Cluster could account for 1.3 GW of low-carbon hydrogen production by 2030, and 3.7 GW by 2050. This constitutes nearly 25% of the UK Government’s goal of building 5 GW of low-carbon hydrogen capacity by 2030.

The UK Government, through BEIS is currently running the Cluster Sequencing Process to decide which of the UK’s four industrial Clusters will receive a proportion of up to £1bn of Government funding. The Scottish Cluster bid was submitted on Friday 9th July 2021.

Alan James, Director of Storegga, lead developer of the Acorn Project, said:
“This analysis of the Scottish Cluster’s impact illustrates not only how vital the Scottish Cluster is to meeting the UK’s net zero by 2050 pledge, but also just how important it will be for direct and indirect highly skilled employment in the years and decades ahead. This is particularly important here in Scotland as workers in the oil and gas industry see new opportunities in the low-carbon sector as we move steadily towards net zero in 2045. The Acorn Project, which provides the critical infrastructure to the Scottish Cluster, can be rapidly scaled to meet demand, thanks to the ability to reuse infrastructure from Scotland’s oil and gas industry, giving ready access to world class CO2 storage that exists deep underground about 100km out from the St Fergus gas terminal. There is simply no time to lose.”

Sir Ian Wood, Chair of ETZ Ltd said:
“Today’s report highlights the economic importance of fast-tracking energy transition projects such as Acorn CCS and Acorn Hydrogen, which will contribute to net zero and provide on average 8,900 supply chain jobs per annum during the life of future Scottish CCS, Hydrogen and Direct Air Capture projects. Supporting exciting new energy transition opportunities such as these is the primary reason for developing the Energy Transition Zone in Aberdeen, which will play a pivotal role in establishing North East Scotland as a global leader in energy transition and a future exporter of products, services, technologies and skills. We encourage the UK Government to be ambitious and maximise the level of green recovery investment in all UK CCS projects, in particular the Scottish cluster which has the added advantage of repurposing existing infrastructure, as CCS will be key to enabling both the oil & gas sector and the wider UK industry to decarbonise.”  

Just Transition Minister Richard Lochhead said:
“The development of CCUS as an industrial scale decarbonisation system has the potential to make a big contribution to our just transition to net zero.

“We are supportive of the Acorn project, considered the most advanced CCS project in the UK. It, and the wider Scottish Cluster, has vast potential to support decarbonisation in Scotland, the UK and the wider world. It is critical that the UK Government selects Acorn and the Scottish Cluster to be among the first CCU clusters to be awarded funding through its current cluster sequencing process.

“Today’s report outlines the range of transition opportunities that CCUS presents. Scotland is the most cost-effective place to begin CCUS in the UK given the capacity for CO2 storage in the North Sea and the existing oil and gas infrastructure available to repurpose for CO2 transport and storage. Vitally, there is also a huge opportunity for Scottish oil and gas firms, domestic supply chain companies and our wider economy to harness the skills and expertise of our current workforces to create many good, green jobs in the coming years.”

Andy McDonald, Head of Low Carbon Transition, Scottish Enterprise, said:
“I welcome this analysis of the impact of the Scottish Cluster that incorporates key businesses and organisations in North East Scotland and fits with the energy transition ambition too. The creation of thousands of jobs over the next decade highlights how vital the Scottish Cluster is to the economy as well as Scotland’s net zero 2045 targets.

“Scottish Enterprise’s focus on green job creation will support the work of the cluster in future and I look forward to seeing the project progress as it is a key element in shaping the decarbonisation of industry as well as future skills and growth of the clean energy economy.”

KeyFacts Energy Industry Directory: Storegga