Action Plan: Carbon Capture and Utilisation – sector innovation

The study was commissioned by Scottish Enterprise (SE) and Falkirk Council (FC) with the aim of informing Falkirk Growth deal plans on implementation of Carbon Capture and Utilisation (CCU) projects as part of industrial decarbonization plans. The report highlights the current situation of CCU industry in Scotland, maps existing value chain and capabilities (capture to valorisation of CO2), identifies existing activities, market opportunities, innovation support systems and challenges that can help shape and inform CCU project implementation in Scotland. The study findings and recommendations were used to identify priority actions to encourage CCU developments in Scotland. The plan has been developed in the context of Scottish Government’s Net Zero emissions commitment for 2045 and the Just Transition Commission.

A sector innovation systems approach was used for the report. Mix of desk research, one to one and one to many consultations with industry and stakeholders were used to compile the report and develop the action plan.

CO2 can be converted into products such as: commodity chemicals, that are required for the manufacturers of numerous products including polymers and pharmaceuticals, biofuels, construction materials, foodstuffs for human consumption and feed for animals. It can, in some situations, simply be supplied as a gas for use in industrial processes. In Scotland there is appetite amongst the larger industrial emitters to tackle this challenge. There are also a growing number of research groups, innovation centres and innovative companies that offer solutions. The value chain and the scale of activity at each stage is weak in Scotland compared to other nations. Public and private investment to further develop and validate new technologies at commercial scale, fiscal incentives such as tax relief and public procurement and regulatory changes to encourage development of products utilising captured CO2 are some of the solutions to help address the weakness in the value chain. Specific opportunities for Scotland include, production of biofuels e.g. for aviation fuels and growth of microalgae to produce feed that can supply the significant aquaculture industry in Scotland and reduce imports. If this opportunity is successfully developed, it will not only contribute towards Scotland’s ambition to be net zero carbon by 2045, it will also establish sustainable manufacturing businesses, and develop technologies and products that can be exported across the globe. Failure to seize this opportunity will mean that other nations will take the lead and will most likely result in manufacturing companies moving operations from Scotland to avoid punitive emissions regulations if there are no viable CCU solutions.

The report includes an initial action plan to accelerate development of CCU activity which focuses on innovation support and wider engagement activities, however it highlights the importance of wider, political and policy interventions to catalyse change. Clear strategy and leadership for mitigation of carbon emissions, development of market pull, investment in necessary linked infrastructure i.e. energy generation, are highlighted in the plan as key actions to create an environment that enables companies to operate within a clear framework and more confidently invest in CCU activity.