UK Government opens £64m funding competition for carbon capture innovations

Under the Ten Point Plan

The Direct Air Capture and Greenhouse Gas Removal Programme was first announced in June 2020 and, today, the second phase of the funding scheme opened for applications. Applicants are invited to bid for a share of £64m in grant funding.

Only projects which were successful in the first phase of the scheme will be eligible to bid for phase two. The aim of this second phase is to take projects beyond design and feasibility studies, which will have been supported in the first phase, towards demonstration. The Department for Business, Energy and Industrial Strategy (BEIS) believes that at least one of the supported projects will reach commercial operations by 2025.

A total of 24 projects were successful under the first phase of the scheme and there is a mix of man-made technologies in the cohort. They include bio-energy co-located with carbon capture and storage; DAC arrays powered by nuclear energy and passive lime carbonation.

Funding for the programme is being provided through the Government’s £1bn Net-Zero Innovation Fund, first announced at the Budget in March.

The UK’s Climate Change Committee (CCC) recommends that the nation prepares to capture 22 million tonnes of CO2e annually using man-made and nature-based methods by 2030, in order to reach its Sixth Carbon Budget commitment. The Committee warned this summer that current BEIS plans are likely to deliver just 10 million tonnes of capture annually by the end of the decade. Several influential investors and NGOs are also recommending stronger action.

Man-made technologies are a “non-optional” component of the UK’s transition to net-zero, the CCC has stated, but several green groups are warning that they must not be positioned as a “silver bullet” – or an excuse to continue high-carbon practices or to de-prioritise nature-based solutions.

For context, global emissions in 2020 were 42 gigatonnes. At present, man-made carbon removal solutions are estimated to be capturing just 38.5 million metric tonnes of CO2e annually; less than one-thousandth of the global total. While a rapid expansion of capacity is forecast, it is, of course, not guaranteed.

Energy efficiency funding

Also launching this week at BEIS is the eighth round of funding from the Energy Entrepreneurs Fund, which provides grant funding to SMEs developing and scaling up new technologies that could improve energy efficiency and help organisations to self-generate low-carbon electricity and heat.

Initially, £11m of funding was planned for this phase, but BEIS is bringing the total to £30m. It said in a statement that the funding increase was made to account for “a large number of exceptional, high-quality applications”.

In total, 54 projects have been selected to receive a share of funding this time around. They include Aerofoil, which is applying technologies used in Formula 1 racing to improve the energy efficiency of supermarket fridges; Cedeco, which has developed a lower-carbon alternative to grout for offshore wind farm foundations, and Guru Systems, which optimises heat networks for efficiency.

BEIS said in a statement that the strong uptake of the Fund by businesses “demonstrates the government’s desire to support new ideas and encourage entrepreneurial spirit, particularly from small businesses, to cement the UK as a world-leader for green innovation”.

Sarah George