The purpose of this document is to set out initial detail on the CIF, which will primarily support capital expenditure on T&S networks and ICC projects. The oil and gas sector are anticipated to invest £2-3 billion in T&S infrastructure by 2030. We expect the package of support offered by government, delivered through a combination of capital investment and sustainable business models, to leverage significant investment by the private sector. Support for power CCUS will be funded by consumer subsidies, as announced at the spring 2020 budget. Funding for electrolytic ‘green’ hydrogen projects will be allocated through a separate process. capital expenditure for CCUS-enabled ‘blue’ hydrogen projects from the £240m Net Zero Hydrogen Fund (NZHF). an economic licence that grants the licensee a regulated revenue stream facilitated by the right to charge a regulated fee (the ‘T&S fee’) from completion of construction and.a revenue mechanism to bring through private sector investment into ICC and hydrogen projects.business models for Transport & Storage (T&S), power, industrial carbon capture (ICC), low carbon hydrogen and potentially bioenergy with carbon capture and storage (BECCS), which include:.The CIF forms an important part of the package of government support that is expected to be allocated to clusters through the proposed Cluster Sequencing process, along with: This document is being published alongside the Cluster Sequencing for Carbon Capture Usage and Storage Deployment: Phase 1 document, and the updates to the Business Models to set out current plans for the design of the CIF. The Carbon Capture and Storage Infrastructure Fund (CIF) was first announced at Budget in March 2020, and its allocation of £1bn was confirmed at the Spending Review in November 2020. In February this year, BEIS published a consultation seeking input on a potential approach to determine a sequence for locations to deploy CCUS in order to meet this commitment. Included in the Ten Point Plan was a commitment to deploy CCUS in a minimum of two clusters by the mid-2020s, and four clusters by 2030 at the latest, with an ambition to capture 10MtCO₂/year by 2030. The government has therefore set its agenda for a clean, resilient, and sustainable economic recovery, as the UK builds back from the impacts of Covid-19. This is a significant step in the UK’s global climate leadership, and Carbon Capture, Usage and Storage (CCUS) and hydrogen will be critical to meeting these commitments. Last month government accepted the Climate Change Committee’s (CCC) Carbon Budget 6 recommendation. In November 2020, the government published the Ten Point Plan for a Green Industrial Revolution, with commitments focused on driving innovation, boosting export opportunities, and generating green jobs and growth across the country to level up regions of the UK.
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