The UK government and Italian energy company Eni gave the final go-ahead on Thursday for a 38-mile pipeline to start capturing and storing the carbon dioxide emissions from industrial plants around Liverpool and Manchester from 2028.
The deal, which was first reported by the Financial Times on Wednesday, was announced by Sir Keir Starmer at an energy security summit in London.
Eni’s pipeline is a key part of HyNet North West, an industrial cluster that will also include new plants to produce hydrogen for use by local manufacturers, such as glassmaker Pilkingtons.
The prime minister said the energy transition was a “chance to reignite our industrial heartlands”. He added: “We finalised a deal with Eni that will see them award £2bn in supply chain contracts for the HyNet carbon capture and storage project, creating 2,000 jobs across North Wales and the North West.”
Eni’s pipeline will initially carry 4.5mn tonnes of carbon dioxide a year out into the sea off the coast of Liverpool and bury it in depleted gasfields. The capacity will rise to 10mn tonnes a year after 2030, the equivalent of the annual emissions of 4mn cars.
Eni did not disclose how much it would spend on the project, or further financial details. In the face of falling oil prices, the Italian energy company said on Thursday that it would trim its capital spending for the year by at least €500mn this year.
HyNet’s backers say that making local industry more climate friendly will help to safeguard the 350,000 manufacturing jobs in the region and create £17bn of economic value over the next 25 years.
The final approval of the project came after the government confirmed last October that it would offer almost £22bn of support over 25 years to HyNet and another project on the east coast, Net Zero Teeside.
At the time, Eni’s chief executive Claudio Descalzi said the support was a “significant step” to setting up a British carbon capture industry. Eni’s pipeline also won planning permission in March, clearing the way for the final investment approval.
But there have been concerns that little money is left over for other carbon capture projects that were vying for government support, notably projects in the Humber and Scotland. The North Sea Transition Authority said that it would need to appraise about 100 sites for potential carbon dioxide storage in order for the UK to hit its net zero target.
Additional reporting by Jim Pickard
