The economic opportunity for a large scale CO2 management industry in Scotland

Strathclyde University’s Centre for Energy Policy was engaged by Scottish Enterprise to research and prepare a short position paper that sets out the high level narrative for Scotland’s capacity/capability and potential opportunity as a CO2 transport and storage provider for capture at home and abroad, prior to the requirement for a more extensive quantitative study. The aim is to set out the basis for a large scale CO2 management industry in Scotland that could potentially serve domestic, UK and international needs.

The methodology consisted of a literature review and engagement with a limited number of stakeholders.

The paper outlines the need to extend the ‘CCUS’ debate, from its current focus in technology and cost reduction, to consider instead the value that may be unlocked, sustained and created across the economy through development of a world leading large scale CO2 management industry. The proposition is development of a Scottish industry that builds on our existing strengths to enable decarbonisation of intractable sectors like high value manufacturing (HVM) and domestic heating, while also providing new export opportunities as European nations respond to the ambitions of the Paris Agreement. It is an opportunity that can be realised through the continued transition of unabated oil and gas towards zero emission energy systems, exploiting the already strong supply chain links within the Scottish economy, and, crucially, providing sustained, secure and attractive career opportunities to existing and new Scottish workforce entrants. Initial estimates suggest that by 2030 anywhere between 7,000 and 45,000 UK jobs could ultimately be associated with Scotland securing 40% of the carbon storage element of a European CO2 management market. By 2050 this could rise to between 22,000 and 105,000 jobs, and more as the industry extends to low carbon fuel supply.

More work needs to be done to fully assess and quantify the potential returns to the Scottish economy of fostering and promoting a large scale CO2 management industry that can both service our own decarbonisation needs and constitute a new export opportunity. The latter would involve transporting, by pipeline and ships, CO2 that has been captured elsewhere in the UK and Europe to our offshore storage sites, and entering a very, young and innovative market alongside neighbours such as Norway and the Netherlands. Making an early commitment to a new Scottish industry in large scale CO2 management, where we can build on existing skills, capacity and infrastructure - currently in the form of our traditional off and onshore oil and gas industry and associated supply chain – but continuing to shift this capacity to enable and service a zero carbon economy, seems entirely consistent with Scotland’s ambitions for a ‘just transition’.