Britain's carbon capture and storage sector will get just under £22 billion worth of support from the government.
Chancellor Rachel Reeves firmed up the plans overnight ahead of a visit to the northeast alongside prime minister Keir Starmer and energy secretary Ed Miliband on Friday, Following reports of the move earlier this week.
This will see support offered to so-called carbon capture clusters, including the HyNet scheme at Merseyside and another in the northeast, incorporating Teesside.
Some £21.7 billion worth of government funding will be offered from 2028 for 25 years to subsidise carbon capture at the industrial sites.
Plans are for this captured carbon to then be transported to storage in depleted subsea oil and gas reserves.
This comes as the UK aims to capture between 20 million and 30 million tonnes of carbon dioxide annually by 2030, representing a small dent in the UK’s estimated 384.2 million worth of emissions last year.
HyNet and the East Coast Cluster represent Britain’s Track 1 carbon capture projects, meaning they have been identified as being closest to coming online.
BP PLC (LSE:BP.) and Equinor, which are involved in the eastern cluster, are set to be among firms to provide private investment for the plans, according to Reeves.
“This game-changing technology will bring 4,000 good jobs and billions of private investment into communities across Merseyside and Teesside,” Reeves said.
A report overnight had shown Britain's oil and gas heritage left it in a position to become Europe's largest market for captured carbon.
According to industry body Offshore Energies UK (OEUK), depleted oil and gas reserves offer some 78 billion tonnes worth of storage potential, which could hold the equivalent of 200 years' worth of emissions from the UK.