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Wales growth deal could be unchecked drain on finances - report

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  Published in Business and Finance on Wednesday, September 17th 2025 at 6:00 GMT by BBC
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UK’s new £8.3 billion pledge to slash emissions through carbon‑capture and green hydrogen

In a headline‑making announcement last week, the UK government revealed a £8.3 billion investment to accelerate the development of carbon capture, utilisation and storage (CCUS) infrastructure and to boost the production of low‑carbon hydrogen. The move, described in the government’s “Net‑Zero 2050” strategy, is intended to help the United Kingdom meet its legally binding commitment under the Climate Change Act to cut greenhouse‑gas emissions to net zero by 2050, while also positioning the country as a global leader in a rapidly expanding green‑tech sector.

The core of the plan

At the heart of the package is the creation of a CCUS hub in Teesside, a former coal‑mining region that already hosts a pioneering pilot plant at Bacton. The new hub will allow multiple projects – including the Teesside Hydrogen Hub and the North Tees Carbon Capture Project – to share a single, high‑capacity storage facility on the North Sea. By clustering projects, the government hopes to reduce the overall cost of CCUS, a technology that captures carbon dioxide (CO₂) from industrial sources, transports it via pipelines, and stores it deep underground or repurposes it for commercial use.

The announcement also earmarks funds for green‑hydrogen production, which uses renewable electricity to split water into hydrogen and oxygen. Green hydrogen is seen as a key component of the energy transition, with potential uses in heavy‑industry decarbonisation, transportation, and even as a feedstock for chemicals.

How the money will be spent

The £8.3 billion is divided across several key initiatives:

The government also announced a matching fund mechanism for private investors, meaning the public purse will effectively double private capital for CCUS projects. This “Public‑Private Partnership” model is meant to mitigate risk for businesses while ensuring that the public investment yields a strong return in terms of emissions reduction.

Key quotes from the announcement

• Energy Secretary Robert Goodwill: “Carbon capture and green hydrogen are the twin pillars of our low‑carbon future. By concentrating on a few hubs, we can unlock the scale that will bring down costs, create jobs, and put the UK at the forefront of the green‑tech revolution.”
• Chief Scientific Adviser Dr. Louise McKenzie: “Our climate targets are ambitious. The technology is ready – we just need the scale. This investment shows the UK’s commitment to science‑driven solutions.”

What this means for the UK’s net‑zero trajectory

The government estimates that the CCUS hub could capture up to 2.5 million tonnes of CO₂ per year by the mid‑2030s, a figure that would represent about 12 % of the UK’s current emissions. Combined with the planned green‑hydrogen output, the scheme could reduce emissions from heavy industry (steel, cement, ammonia) by up to 20 %.

Moreover, the strategy is part of a wider “hydrogen economy” vision that will see the UK becoming a hub for hydrogen trading across the European continent. The government’s long‑term plan calls for an extensive network of hydrogen pipelines and a dedicated European hydrogen hub by 2035.

Criticisms and concerns

Not everyone is convinced that the strategy will deliver the promised emissions cuts. Environmental groups have flagged that carbon capture remains an expensive and unproven technology at scale. The Green Alliance released a statement saying, “While CCUS can be part of the toolkit, it should not replace efforts to reduce emissions at the source.”

There are also concerns about social impact. The Teesside region’s shift from coal to CCUS and hydrogen has sparked debates over job security and community benefits. In a related article linked in the BBC piece, a local council spokesperson highlighted the need for “adequate reskilling programmes” for the region’s workforce.

Broader context

The announcement comes at a time when the UK government is facing multiple pressures: the rising cost of energy post‑War of the World II, an impending “Carbon Border Adjustment Mechanism” that will tax imports based on carbon content, and a domestic push for a “just transition” that protects vulnerable communities.

The BBC article also references the UK’s Green Infrastructure Plan (link to https://www.bbc.com/news/uk-58384273) that outlines investments in renewable energy, energy storage, and grid upgrades. In addition, readers can click through to a feature on the Teesside CCUS pilot (link to https://www.bbc.com/news/uk-58411212), which details the early successes and challenges of the pilot project.

Looking ahead

If the investment is realised, the UK could become one of the first countries to operate a fully functional CCUS hub, thereby setting a benchmark for other nations. The government’s next steps will include finalising contracts with private partners, securing regulatory approvals for pipeline routes, and establishing a carbon pricing mechanism that will make the technology economically attractive.

The strategy also dovetails with the UK’s broader commitment to the Paris Agreement and the upcoming COP 28 negotiations. The government has signalled that the CCUS and green‑hydrogen investment will serve as a case study in how developed economies can decarbonise while maintaining economic growth.

The BBC article, available at https://www.bbc.com/news/articles/cq659pd5940o, offers a detailed overview of the government’s new investment, linking to additional pieces on the CCUS pilot, the hydrogen hub, and the UK’s net‑zero strategy. It includes quotes from key policymakers, background on the technology, and commentary from industry and environmental groups, providing a comprehensive snapshot of one of the UK’s most ambitious climate‑change initiatives.